Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $421,800; materials of $412,000 and direct labor of $222,000. During the year Adams incurred $444,600 in materials costs, $439,600 in overhead costs and $226,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year.
Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $421,800; materials of $412,000 and direct labor of $222,000. During the year Adams incurred $444,600 in materials costs, $439,600 in overhead costs and $226,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $421,800; materials of $412,000 and direct labor of $222,000. During the year Adams incurred $444,600 in materials costs, $439,600 in overhead costs and $226,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year.
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