Sheffield Music Company makes custom marimbas and xylophones. Since much of the work on these musical instruments is done by hand, the company uses direct labor hours as its manufacturing overhead application base. The company’s annual budgeted overhead costs for 38,000 direct labor hours totaled $494,000. (a) Assume that during the year, the company incurred manufacturing overhead totaling $517,000 for 41,000 direct labor hours. By how much was manufacturing overhead under- or overapplied for the year? overapplied, underapplied, neither Overhead $enter the manufacturing overhead in dollars (b) Assume that during the year, the company incurred manufacturing overhead totaling $517,000 for 39,000 direct labor hours. By how much was manufacturing overhead under- or overapplied for the year? over applied, under applied, neither Overhead $enter the manufacturing overhead in dollars (c) Assume that during the year, the company incurred manufacturing overhead totaling $480,000 for 38,000 direct labor hours. By how much was manufacturing overhead under- or overapplied for the year? over applied, underapplied, neither Overhead $enter the manufacturing overhead in dollars
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Sheffield Music Company makes custom marimbas and xylophones. Since much of the work on these musical instruments is done by hand, the company uses direct labor hours as its manufacturing
| (a) | Assume that during the year, the company incurred manufacturing overhead totaling $517,000 for 41,000 direct labor hours. By how much was manufacturing overhead under- or overapplied for the year? |
|
|
|
| (b) | Assume that during the year, the company incurred manufacturing overhead totaling $517,000 for 39,000 direct labor hours. By how much was manufacturing overhead under- or overapplied for the year? | |
|
|
| (c) | Assume that during the year, the company incurred manufacturing overhead totaling $480,000 for 38,000 direct labor hours. By how much was manufacturing overhead under- or overapplied for the year? | |
|
| Overhead | $enter the manufacturing overhead in dollars |
Predetermined overhead rate = Estimated manufacturing overhead / Estimated direct labor hours
= $494,000 / 38,000 hours
= $13 per hour
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
