Cost and production data for Rob Manufacturing for the 2018 financial year was as follows: Budgeted variable factory overhead $120,000 Budgeted fixed factory overhead $180,000 Total $300,000 Budgeted production (direct labour hours) $15,000 Actual variable factory overhead $125,300 Actual fixed factory overhead $164,700 Total $290,000 Actual production (direct labour hours) 15,500 It is organisational policy and procedure that Factory overhead is applied to production using direct labour hours as the cost driver. Required: (a) Calculate the factory overhead application rate, and, (b) Under or over applied overhead.
Cost and production data for Rob Manufacturing for the 2018 financial year was as follows: Budgeted variable factory overhead $120,000 Budgeted fixed factory overhead $180,000 Total $300,000 Budgeted production (direct labour hours) $15,000 Actual variable factory overhead $125,300 Actual fixed factory overhead $164,700 Total $290,000 Actual production (direct labour hours) 15,500 It is organisational policy and procedure that Factory overhead is applied to production using direct labour hours as the cost driver. Required: (a) Calculate the factory overhead application rate, and, (b) Under or over applied overhead.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Cost and production data for Rob Manufacturing for the 2018 financial year was as follows:
Budgeted variable factory overhead $120,000
Budgeted fixed factory overhead $180,000
Total $300,000
Budgeted production (direct labour hours) $15,000
Actual variable factory overhead $125,300
Actual fixed factory overhead $164,700
Total $290,000
Actual production (direct labour hours) 15,500
It is organisational policy and procedure that Factory overhead is applied to production using direct labour hours as the cost driver.
Required:
(a) Calculate the factory overhead application rate, and,
(b) Under or over applied overhead.
Expert Solution
Step 1 Computation of overhead application rate
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