Lynch Audio produces stereo components for a major automotive stereo manufacturer. It currently uses the machine hour method of applying factory overhead to production. Information for the previous year follows: Budgeted amounts Actual amounts Factory overhead $3,000,000 $3,050,000 Direct labor hours @ $10 per hour 250,000 248,000 Machine hours 750,000 735,000 During the year, Lynch produced a new product, Super Tweeters, which involved $27,000 of material, 3,100 direct labor hours and 4,500 machine hours. a. Compute the predetermined factory overhead rate. b. Compute the amount of under- or overapplied factory overhead. c. Determine the cost of the Super Tweeter job.
Lynch Audio produces stereo components for a major automotive stereo manufacturer. It currently uses the machine hour method of applying factory overhead to production. Information for the previous year follows: Budgeted amounts Actual amounts Factory overhead $3,000,000 $3,050,000 Direct labor hours @ $10 per hour 250,000 248,000 Machine hours 750,000 735,000 During the year, Lynch produced a new product, Super Tweeters, which involved $27,000 of material, 3,100 direct labor hours and 4,500 machine hours. a. Compute the predetermined factory overhead rate. b. Compute the amount of under- or overapplied factory overhead. c. Determine the cost of the Super Tweeter job.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Lynch Audio produces stereo components for a major automotive stereo manufacturer. It currently uses the machine hour method of applying factory
|
|
Budgeted amounts |
Actual amounts |
|
Factory overhead |
$3,000,000 |
$3,050,000 |
|
Direct labor hours @ $10 per hour |
250,000 |
248,000 |
|
Machine hours |
750,000 |
735,000 |
During the year, Lynch produced a new product, Super Tweeters, which involved $27,000 of material, 3,100 direct labor hours and 4,500 machine hours.
a. Compute the predetermined factory overhead rate.
b. Compute the amount of under- or overapplied factory overhead.
c. Determine the cost of the Super Tweeter job.
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