Cavaliers Inc. manufactures pipes applies manufactring overhead cost to produtio

Question

Cavaliers Inc. manufactures pipes applies manufactring overhead cost to prodution at a budgeted inderect-cost rate of $15 per direct labor hour. The following are obtained from accouting reccords for june 2015

Direct Materials = $280,000 Direct labor (7,000 units @11/hour) = $77,000 Indirect labor = $20,000 Plant Facility rent = $60,000 Depreciation machinery/equiptment = $30,000

sales commission expense $40,000 admin expense = $50,000

1.What is the actual manufacturing overhead cost incurred in june 2015. show solution

2.The amount of manufacturing overhead allocated to all jobs during June 2015 , show solution.

3. For june 2015, manufacturing overhead was overapplied or under applied, how much? show solution

Explanation / Answer

1. the actual manufacturing overhead cost incurred in june 2015 = indirect labor $20000 + Plant facility rent $60000 + Depreciation $30000 = $110000

2. The amount of manufacturing overhead allocated to all jobs during June 2015= 7000 (actual direct labor hours) * $15 (predetermined overhead rate) = $105000

3. For june 2015, manufacturing overhead was under applied= Actual overhead - Allocated overhead = $110000 - $105000 = $5000

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