Wilson Enterprises applies overhead based on direct labor cost. The company estimates that their overhead for...

Wilson Enterprises applies overhead based on direct labor cost. The company estimates that their overhead for the year will be $240,000, and direct labor cost to be $300,000. Actual direct labor cost for Martinez Manufacturing was $280,000 and actual overhead costs were $220,000. At the end of the year, manufacturing overhead was:

1. Overapplied by $20,000.

2. Underapplied by $20,000.

3. Overapplied by $4,000.

4. Underapplied by $4,000.

Solutions

Expert Solution

3. Overapplied by $4,000.

Working:

Overhead rate	=	Estimated Overhead/Estimated direct labor cost
	=	$ 2,40,000	/	$ 3,00,000
	=	$ 0.80	Per direct labor cost

Applied Overhead	=	Actual Labor cost*Overhead rate
	=	$ 2,80,000	x	$ 0.80	Per direct labor cost
	=	$ 2,24,000

Actual Overhead cost		$ 2,20,000

Applied Overhead is more than actual overhead.So, at the end of year manufacturing overhead was overappliedd by $ 4,000.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

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...

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...

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...

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...

THE Company applies overhead costs to jobs using direct labor cost as an activity. For the...

THE Company applies overhead costs to jobs using direct labor cost as an activity. For the current year, THE Company reported estimated overhead cost of $500,000 while the actual overhead cost totaled $510,000. THE's estimated direct labor cost was $200,000 while the actual direct labor cost was $220,000. For the current year, overhead was: Group of answer choices under-applied by $10,000 under-applied by $20,000 under-applied by $30,000 under-applied by $40,000 over-applied by $10,000 over-applied by $20,000 over-applied by $30,000 over-applied...

Tiger Corporation uses a standard cost system and applies overhead based on direct labor hours. If...

Tiger Corporation uses a standard cost system and applies overhead based on direct labor hours. If the actual quantity of direct labor hours exceeds the standard hours allowed: an favorable variable overhead rate variance will exist an unfavorable variable overhead efficiency variance will exist a favorable variable overhead efficiency variance will exist a favorable labor rate variance will exist

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...

Crane Company applies overhead on the basis of 120% of direct labor cost. Job No. 190...

Crane Company applies overhead on the basis of 120% of direct labor cost. Job No. 190 is charged with $350000 of direct materials costs and $150000 of manufacturing overhead. The total manufacturing costs for Job No. 190 is $500000. $570000. $625000. $680000.

Subjects