Nexus Electronics produces wireless earbuds as contract manufacturer. Overhead is applied at a rate of $38 per direct labor hour. The direct labor rate is $15 per hour. In April, there was no beginning or ending work in process, and the assembly department produced 12,000 finished earbuds. The materials cost was $84,000, and there were 1,800 direct labor hours worked during the month. Actual overhead spending was $67,200 during the month. Calculate the total cost of production in the month of April and the cost per unit for each earbud produced. Determine if overhead was over applied or under applied and by what amount.

Nexus Electronics produces wireless earbuds as contract manufacturer. Overhead is applied at a rate of $38 per direct labor hour. The direct labor rate is $15 per hour. In April, there was no beginning or ending work in process, and the assembly department produced 12,000 finished earbuds. The materials cost was $84,000, and there were 1,800 direct labor hours worked during the month. Actual overhead spending was $67,200 during the month. Calculate the total cost of production in the month of April and the cost per unit for each earbud produced. Determine if overhead was over applied or under applied and by what amount.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 10E: Ada Clothes Company produced 40,000 units during April. The Cutting Department used 12,800 direct...

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