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 $179,540. Estimated direct labor cost was $456,490 for 19,100 hours.

Actual costs for the most recent month are summarized here:

Item Description Total Cost
Direct labor (1,910 hours) $ 45,650
Indirect costs
Indirect labor 2,420
Indirect materials 3,430
Factory rent 3,370
Factory supervision 4,860
Factory depreciation 5,730
Factory janitorial work 1,190
Factory insurance 1,780
General and administrative salaries 4,280
Selling expenses 5,440


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.

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