Question

In: Accounting

Northface Company applies overhead based upon labor-hours. Budgeted factory overhead was $910,000 and budgeted labor-hours were...

Northface Company applies overhead based upon labor-hours. Budgeted factory overhead was $910,000 and budgeted labor-hours were 32,500. Actual factory overhead was $893,675 and actual labor-hours were 31,560.

Required:

a. Compute the overhead application rate.
b. Compute the amount of overhead applied to production.
c. Determine the amount of over- or underapplied overhead.

Solutions

Expert Solution

a) Overhead application rate= Budgeted Overhead/Actual Labor Hours

                                                =910000/32500= $28 per labor hour

b) Overhead applied for production= Actual labor hours*Overhead application rate

                                                            =31560*28= $883,680

c) Actual overhead(893675) is more than applied overhead(883680).Hence there will be under absorption of overhead.

Actual Overhead
(1)
 Overhead Applied
(2)
 Under applied
Overhead
(3)=(1)-(2)
893675 883680 9995

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Martinez Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $362,000 and budgeted machine-hours were...
Martinez Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $362,000 and budgeted machine-hours were 24,000. Actual factory overhead was $393,000 and actual machine-hours were 27,000. Before disposition of under/overapplied overhead, the cost of goods sold was $610,000 and ending inventories were as follows:             Direct materials                    $ 80,000             WIP                                        200,000             Finished goods                       270,000                   Total                               $550,000 Required: a.   Determine the budgeted factory overhead rate per machine-hour. b.   Compute the over/underapplied overhead. c.   Prepare the journal entry to dispose of the variance using the write-off to cost of...
Schulz Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $266,400 and budgeted machine-hours were...
Schulz Corporation applies overhead based upon machine-hours. Budgeted factory overhead was $266,400 and budgeted machine-hours were 18,500. Actual factory overhead was $287,920 and actual machine-hours were 19,050. Before disposition of under/overapplied overhead, the cost of goods sold was $560,000 and ending inventories were as follows: Direct Materials: $60,000 WIP: 190,000 Finished Goods: 250,000 Total: $500,000 1) Determine the budgeted factor overhead rate per machine-hour. 2) Compute the over/underapplied overhead. 3) Select the journal entry to dispose of the variance using...
A manufacturing company applies factory overhead based on direct labor hours.
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000and direct labor hours would be 45,000. Actual manufacturing overhead costs incurred were $377,200, and actual direct labor hours were 47,000. The entry to apply the factory overhead costs for the year would include aa. debit to factory overhead for $377,200.b. debit to factory overhead for $360,000.c. credit to factory overhead for $376,000.d. credit to...
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the...
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $327,691 and direct labor hours would be 46,813. Actual factory overhead costs incurred were $344,427, and actual direct labor hours were 51,254. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year? a.$31,087 underapplied b.$14,351 overapplied c.$14,351 underapplied d.$358,778 overapplied
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the...
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $540,000 and direct labor hours would be 45,000. Actual factory overhead costs incurred were $566,000, and actual direct labor hours were 47,000. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year?
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the...
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $344,000 and direct labor hours would be 45,000. Actual manufacturing overhead costs incurred were $316,200, and actual direct labor hours were 54,400. The entry to apply the factory overhead costs for the year would include a a.debit to Factory Overhead for $316,200 b.credit to Factory Overhead for $344,000 c.credit to Factory Overhead for $415,616 d.debit...
Martin Corp. applies overhead based on machine hours. Budgeted factory overhead is $275,000 and budgeted machine...
Martin Corp. applies overhead based on machine hours. Budgeted factory overhead is $275,000 and budgeted machine hours were 19,000. Actual factory overhead was $270,000 and actual machine hours were 19,100. Before disposition of under/overapplied overhead, cost of goods sold was $500,000 and ending inventories were as follows: Direct materials50,000 WIP200,000 Finished Goods300,000 Total550,000 Determine the budgeted factory overhead rate per machine hour Compute the over/underapplied overhead Prepare the journal entry to dispose of the variance using the write-off to cost...
2- A manufacturing company applies factory overhead based on direct labor hours. At the beginning of...
2- A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $282,646 and direct labor hours would be 40,378. Actual factory overhead costs incurred were $358,062, and actual direct labor hours were 53,283. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year? a.$14,919 underapplied b.$90,335 underapplied c.$14,919 overapplied d.$372,981 overapplied 3 - Costs that are incurred in generating...
Jordan Company currently is using a plant-wide factory overhead rate based on machine hours. The budgeted...
Jordan Company currently is using a plant-wide factory overhead rate based on machine hours. The budgeted factory overhead costs is $405,000. Company has two departments, X and Y. Company is considering use of departmental overhead rates for the allocation of each departments’ overhead costs to jobs. Overhead would be applied based on direct labor cost in Department X and machine-hours in Department Y. The following additional information is available: Budgeted Amounts                           Department X           Department Y Direct labor cost                                          $180,000                     $165,000...
Savannah Factory applies manufacturing overhead based on direct labor cost. Information concerning manufacturing overhead and labor...
Savannah Factory applies manufacturing overhead based on direct labor cost. Information concerning manufacturing overhead and labor for August follows: Estimated Actual Overhead cost $174,000 $171,100 Direct labor hours 5,800 5,900 Direct labor cost $87,000 $89,975 How much overhead should be applied in total during August? A. $179,950 B. $174,000 C. $177,000 D. $171,100 The manufacturing operations of Saltic Enterprises had the following balances for the month of March: March 1, 2013 March 31, 2013 Raw Materials $11,000 $14,000 Work in...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT