Logan Products computes its predetermined overhead rate annually on the basis of direct labour hours. At the beginning of the year, it estimated that its total manufacturing overhead would be $586,000 and the total of direct labour would be 40,000 hours. Its actual total manufacturing overhead for the year was $713,400 and its actual total direct labour was 41,000 hours. Compute the company's predetermined overhead rate for the year, calculate the total overhead applied, and determine the amount under- or over-applied overhead in the year.

Logan Products computes its predetermined overhead rate annually on the basis of direct labour hours. At the beginning of the year, it estimated that its total manufacturing overhead would be $586,000 and the total of direct labour would be 40,000 hours. Its actual total manufacturing overhead for the year was $713,400 and its actual total direct labour was 41,000 hours. Compute the company's predetermined overhead rate for the year, calculate the total overhead applied, and determine the amount under- or over-applied overhead in the year.

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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