Question Help Frankin inc. manufactures pipes and applies manufactunng overhead

Question

Question Help Frankin inc. manufactures pipes and applies manufactunng overhead costs to production at a budgeted indirect-cost rate of $20 per direc labor-hour. The follovaing data are obtained from the accounting records for June 2018 Direct materials Direct labor (4 200 hours @ $14/hour) Indirect labor Plant facility rent Depreciation on plant machinery and equipment Sales commissions Adminvistrative expenses $160,000 58,800 18,000 34,000 23.000 34.000 28.000 For June 2018, manufacturing overhead is o A. underallocated by SI 9,000 B. overallocated by S9000 O C, underallocated by $9,000 O D. overallocated by S 19.000

Explanation / Answer

Applied overhead = 20*4200 = 84000

Actual overhead = (18000+34000+23000) = 75000

Under or over allocated overhead = 84000-75000

Over allocated overhead = 9000

so answer is b) Overallocated by $9000

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