facturing overhead costs to production at a budgeted indirect-cost rate of $18 per direct labor-hour. The following data are obtained from the accounting records for June 2020: Direct materials $140,000 Direct labor (4,000 hours @ $10/hour) 40,000 Indirect labor 13,000 Plant facility rent 30,000 Depreciation on plant mach. & equip. 22,500 Sales commissions 24,000 Administrative expenses 28,000 For June 2020, manufacturing overhead is overallocated by $6.500 underallocated by $21,500 O ovreallocated by $21.500
facturing overhead costs to production at a budgeted indirect-cost rate of $18 per direct labor-hour. The following data are obtained from the accounting records for June 2020: Direct materials $140,000 Direct labor (4,000 hours @ $10/hour) 40,000 Indirect labor 13,000 Plant facility rent 30,000 Depreciation on plant mach. & equip. 22,500 Sales commissions 24,000 Administrative expenses 28,000 For June 2020, manufacturing overhead is overallocated by $6.500 underallocated by $21,500 O ovreallocated by $21.500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Step 1 Calculation
Allocated Manufacturing Overheads= $18 x 4000
= $ 72000
Total Manufacturing overhead= Indirect labor + plant rent + Depreciation on plant and machinery
= 13000+ 30000+ 22500
= $65500
Therefore the manufacturing overhead is overallocated by (72000-65500)= $6500
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