Question

PROBLEM: 1 (MUST SHOW CALCULATIONS; NO CALCULATIONS NO CREDIT)

BUDGETED DATA:

Budgeted machine hours                                                              60,000 machine hours

Budgeted direct labor hours                                                        400,000 direct labor hours

Budgeted direct labor costs                                                         $6,000,000

Budgeted manufacturing overhead costs                              $10,000,000

Company allocates manufacturing overhead using direct labor hours used

ACTUAL DATA:

Actual manufacturing overhead costs incurred                    $9,700,000

Actual machine hours used                                                          62,000 machine hrs used

Actual direct labor hours used                                                    380,000 actual DL hours used

Calculate budgeted (applied) manufacturing overhead rate per direct labor hour

                                                                                                                                $________________________

Calculate applied (allocated) manufacturing overhead:

                                                                                                                                $_________________________

Is the manufacturing overhead over or under-applied (circle one)       OVER          UNDER

And by how much?                                                                                          $_________________________

Close the overhead accounts assuming that the over or under applied amount is immaterial:

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Answer 1

Answer is given below