Question

In: Accounting

Hipster Company applies overhead based on direct labor hours. At the beginning of the year January...

Hipster Company applies overhead based on direct labor hours. At the beginning of the year January 1, Hipster estimates Overhead cost to be $450,000 and Direct Labor hours to be 90,000. During January, Jones has 6,700 actual direct labor hours.

31. Refer to Figure 5-1

What is the predetermined overhead rate?

a.

$6 per direct labor hour

b.

$5 per direct labor hour

c.

$4 per machine hour

d.

$44,000

e.

none of these

32. Refer to Figure 5-1. What is the amount of overhead applied for January?

a.

$40,200

b.

$66,000

c.

$44,000

d.

$33,500

e.

$480,000

33. Refer to Figure 5-1. If the actual overhead for January is $41,000, what is the overhead variance and is it overapplied or underapplied?

a.

$800 underapplied

b.

$800 overapplied

c.

$7,500 underapplied

d.

$3,000 overapplied

e.

none of these

Solutions

Expert Solution

1) predetermined overhead rate = Estimated overhead /estimated direct labor hours

                            = 450000/90000

                             = $ 5 per DLH

Correct option is " B"

2) amount of overhead applied = Actual hours* overhead rate

                  = 6700 * 5

                  = $ 33500

correct option is " D"

3)Under -applied / (Over-applied) = Actual - applied

                           = 41000-33500

                            = 7500 under -applied

correct option is " C"

ekkarill92 answered 3 months ago
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