Harrold charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of labor hours. The following data pertain to the current year: Budgeted manufacturing overhead: $1,800,000 Actual manufacturing overhead: $1,813,500 Budgeted labor hours: 90,000 Actual labor hours: 92,200 Which of the following choices is the correct status of manufacturing overhead at year-end? a. Overapplied by $13,500. b. Underapplied by $13,500. c. Overapplied by $30,500. d. Underapplied by $30,500. e. Overapplied by $44,000.

Harrold charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of labor hours. The following data pertain to the current year: Budgeted manufacturing overhead: $1,800,000 Actual manufacturing overhead: $1,813,500 Budgeted labor hours: 90,000 Actual labor hours: 92,200 Which of the following choices is the correct status of manufacturing overhead at year-end? a. Overapplied by $13,500. b. Underapplied by $13,500. c. Overapplied by $30,500. d. Underapplied by $30,500. e. Overapplied by $44,000.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 23Q: If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of...

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When setting its predetermined overhead application rate. Tasty Turtle estimated its overhead would be $75,000 and manufacturing would require 25,000 machine hours in the next year. At the end of the year, it found that actual overhead was $74,000 and manufacturing required 24,000 machine hours. Determine the predetermined overhead rate. What is the overhead applied during the year? Prepare the journal entry to eliminate the under- or over applied overhead.
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