Clyde Company gathered the following information for the year ended December 31,

Question

Clyde Company gathered the following information for the year ended December 31, 2017: Direct labor cost incurred stimated manufacturing overhead costs stimated direct labor cost ctual manufacturing overhead costs $165,000 $231,000 $154,000 $250,000 308,000 Estimated direct labor hours Clyde uses direct labor cost to allocate overhead to individual jobs. Answer the following 4 questions showing your computations in order to receive credit. 1. Compute the plant-wide pre-determined manufacturing overhead allocation rate for 2017. 2. Compute over/under allocated overhead at 12/31/2017. Indicate whether overhead is over/under applied 3. Ifjob #101 consists of Direct Material costs of $5,000, and Direct Labor costs of $12,000, compute the total cost ofjob #101. 4. Job #101 consists of 10,000 units. Compute the cost per unit for Job #101.

Explanation / Answer

Answer 1. Predetermined Overhead Rate = $231,000 (Estimated Manufacturing Overhead) / $154,000 (Estimated Direct Labor Cost) Predetermined Overhead Rate = 150% of Direct Labor Cost Answer 2. Applied Manufacturing Overhead = 150% X $165,000 (Actual Direct Labor Cost) Applied Manufacturing Overhead = $247,500 Actual Manufacturing Overhead    250,000.00 Applied Manufacturing Overhead    247,500.00 Underapplied Overhead        2,500.00 Answer 3. Job # 101 Direct Material        5,000.00 Direct Labor      12,000.00 Manufacturing Overhead Applied - $12,000 X 150%      18,000.00 Total Cost      35,000.00 Answer 4. Job # 101 Total Cost      35,000.00 No. of Units      10,000.00 Cost per Unit                 3.50

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