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The following information pertains to Trenton Glass Works for the year just ended.
Budgeted direct-labor cost: 70,000 hours (practical capacity) at $16 per hour
Actual direct-labor cost: 80,000 hours at $17.50 per hour
Budgeted manufacturing overhead: $997,500
Actual selling and administrative expenses: 439,000
Actual manufacturing overhead:
Depreciation $ 233,000
Property taxes 23,000
Indirect labor 80,000
Supervisory salaries 202,000
Utilities 58,000
Insurance 32,000
Rental of space 301,000
Indirect material (see data below) 79,000
Indirect material:
Beginning inventory, January 1 48,000
Purchases during the year 95,000
Ending inventory, December 31 64,000
Calculate the overapplied or underapplied overhead for the year. (Round your intermediate calculations to 2 decimal places.)

Sagot :

Answer:

Over-applied Overhead  $134,000

Explanation:

The computation of the overhead applied or under applied overhead is given below:

Depreciation $233,000  

Property tax $21,000  

indirect labor $80,000  

Supervisory salaries $202,000  

utilities    $58,000  

Insurance  $32,000  

Rental of space $301,000  

Indirect material $79,000  

Total OH incurred   $1,006,000  

OH applied       $1,140,000  

(80000 hours at 14.25 per hour) ($997,500 ÷ 70,000)  

Over-applied Overhead  $134,000

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