Question

Verizox Company uses a job order cost system with manufacturing overhead applied to products based on...

Verizox Company uses a job order cost system with manufacturing overhead applied to products based on direct labor hours. At the beginning of the most recent year, the company estimated its manufacturing overhead cost at $195,940. Estimated direct labor cost was $465,600 for 19,400 hours.

Actual costs for the most recent month are summarized here:

Item Description Total Cost
Direct labor (1,940 hours) $ 46,561
Indirect costs
Indirect labor 2,530
Indirect materials 3,360
Factory rent 3,230
Factory supervision 4,820
Factory depreciation 5,650
Factory janitorial work 1,210
Factory insurance 1,790
General and administrative salaries 4,140
Selling expenses 5,480


Required:
1.
Calculate the predetermined overhead rate.

2. Calculate the amount of applied manufacturing overhead.

3. Calculate actual manufacturing overhead costs.

4. Compute over- or underapplied overhead.

Homework Answers

Answer #2

1. Predetermined overhead rate = Estimated manufacturing overhead/ Estimated no of hours

=$195,940/19,400

=$10.1

2. Applied manufacturing overhead = 1,940×$10.1 =$19,594

3. Actual manufacturing overhead

Indirect labor $2,530
Indirect materials $3,360
Factory rent $3,230
Factory supervision $4,820
Factory Depreciation $5,650
Factory janitorial work $1,210
Factory insurance $1,790
Actual manufacturing overhead $22,590

4.

Actual manufacturing overhead =$22,590

Applied overhead =$19,594

Overhead Underapplied =$2,996($22,590-$19,594)

answered by: anonymous
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