The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year the company expects fixed overhead costs to be $600,000 and variable costs to be S800,000. The expected machine hours are 6,000 and the expected direct labor hours are 80,000. The actual fixed overhead costs are $700,00 and the actual variable overhead costs are $750,000. The actual machine hours during the year are 5,500 and the actual direct labor hours are 90,000.a. How much overhead is allocated?b. What is the over/underabsorbed overhead?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At
the beginning of the year the company expects fixed overhead costs to be $600,000 and variable costs to be S800,000. The
expected machine hours are 6,000 and the expected direct labor hours are 80,000. The actual fixed overhead costs are $700,000
and the actual variable overhead costs are $750,000. The actual machine hours during the year are 5,500 and the actual direct
labor hours are 90,000.a. How much overhead is allocated?b. What is the over/underabsorbed overhead?
Transcribed Image Text:The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year the company expects fixed overhead costs to be $600,000 and variable costs to be S800,000. The expected machine hours are 6,000 and the expected direct labor hours are 80,000. The actual fixed overhead costs are $700,000 and the actual variable overhead costs are $750,000. The actual machine hours during the year are 5,500 and the actual direct labor hours are 90,000.a. How much overhead is allocated?b. What is the over/underabsorbed overhead?
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