Ask Question
1 April, 02:48

The following cost data relate to the manufacturing activities of Black Company during the just completed year: Manufacturing overhead costs incurred: Property taxes, factory $ 3,000 Utilities, factory 5,000 Indirect labor 10,000 Depreciation, factory 24,000 Insurance, factory 6,000 Total actual manufacturing overhead costs $ 48,000 Other costs incurred: Purchases of raw materials $ 32,000 Direct labor cost $ 40,000 Inventories: Raw materials, beginning $ 8,000 Raw materials, ending $ 7,000 Work in process, beginning $ 6,000 Work in process, ending $ 7,500 The company uses a predetermined overhead rate to apply overhead cost to jobs. The rate for the year was $5 per machine-hour; a total of 10,000 machine-hours was recorded for the year. All raw materials ultimately become direct materials-none are classified as indirect materials. Required: Compute the amount of underapplied or overapplied overhead cost for the year.

+2
Answers (1)
  1. 1 April, 04:26
    0
    2,000 overapplied

    Explanation:

    Giving the following information:

    Manufacturing overhead costs incurred:

    Property taxes, factory $ 3,000

    Utilities, factory 5,000

    Indirect labor 10,000

    Depreciation, factory 24,000

    Insurance, factory 6,000

    Total actual manufacturing overhead costs $ 48,000

    The rate for the year was $5 per machine-hour; a total of 10,000 machine-hours was recorded for the year.

    First, we need to calculate the allocated MOH for the year:

    Allocated MOH = Estimated manufacturing overhead rate * Actual amount of allocation base

    Allocated MOH = 5*10,000 = $50,000

    Under/Over applied = real MOH - allocated MOH = 48,000 - 50,000 = 2,000 overapplied
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The following cost data relate to the manufacturing activities of Black Company during the just completed year: Manufacturing overhead ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers