Hamilton company applies manufacturing overhead costs to product based on direct labor hours. the company estimates...

Hamilton company applies manufacturing overhead costs to product based on direct labor hours. the company estimates manufacturing overhead cots for the year to be 280000 and direct labor hours to be 20000. actual overhead and actual direct labor hours for the year were 335000 and 25000 hour respectively

required

1. compute over or underapplied overhead

2a. which accounts will be affected by the over- or underapplied manufacturing overhead ?

2b. will the accounts be increased or decreased to abjust for the over- or underapplied manufacturing overhead ?

Solutions

Expert Solution

Estimated manufacturing overhead	280000
Divide by Estimated direct labor hours	20000
Predetermined overhead rate	14

1
Applied manufacturing overhead	350000	=25000*14
Less: Actual overhead	335000
Overapplied overhead	15000

2a
Cost of Goods Sold and Manufacturing Overhead are affected.

2b
Cost of Goods Sold	decreased by	15000
Manufacturing Overhead	increased by	15000

ekkarill92 answered 1 year ago

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