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In: Accounting

KLM Company listed the following data for 2017:             Budgeted factory overhead                  &nbsp

KLM Company listed the following data for 2017:

            Budgeted factory overhead                                $2,015,800

            Actual factory overhead                                     2,125,900

            Budgeted direct labor hours                                    195,000

            Budgeted machine hours                                          86,875

            Actual machine hours                                               91,500

            Actual direct labor hours                                          189,600

           

            (a) Assuming KLM applied overhead based on direct labor hours; calculate the company's predetermined overhead rate for 2017

            (b) Assuming KLM applied overhead based on machine hours; calculate the company's predetermined overhead rate for 2017

            (c) If overhead is applied based on direct labor hours, calculate the overapplied/underapplied overhead.

            (d) If overhead is applied based on machine hours, calculate the overapplied/underapplied overhead.

Solutions

Expert Solution

(a) Assuming KLM applied overhead based on direct labor hours; calculate the company's predetermined overhead rate for 2017

Predetermine overhead rate = Budgeted overhead/Budgeted labour hour

= 2015800/195000

Predetermine overhead rate = 10.33 per labour hour

(b) Assuming KLM applied overhead based on machine hours; calculate the company's predetermined overhead rate for 2017

Predetermine overhead rate = Budgeted overhead/Budgeted machine hour

= 2015800/86875

Predetermine overhead rate = 23.20 per machine hour

(c) If overhead is applied based on direct labor hours, calculate the overapplied/underapplied overhead.

overapplied/underapplied overhead = Applied overhead-actual overhead

= 189600*10.33-2125900

Under applied overhead = 167332

(d) If overhead is applied based on machine hours, calculate the overapplied/underapplied overhead.

overapplied/underapplied overhead = Applied overhead-actual overhead

= 91500*23.20-2125900

Under applied overhead = 3100

ekkarill92 answered 1 year ago
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