1 FloresFlores 2 How much manufacturing overhead was allocat

1.

Flores\'Flores\'

2.

How much manufacturing overhead was allocated to jobs during the year?

3.

How much manufacturing overhead was incurred during the year? Is manufacturing overhead underallocated or overallocated at the end of the year? By how much?

4.

1.	Compute Flores\'Flores\' predetermined manufacturing overhead rate.
2.	How much manufacturing overhead was allocated to jobs during the year?
3.	How much manufacturing overhead was incurred during the year? Is manufacturing overhead underallocated or overallocated at the end of the year? By how much?
4.	Were the jobs overcosted or undercosted? By how much?

Data Table $570,000 $ 1,600,000 71,250 Manufacturing overhead costs cl At the end of the year, the company had actually incurred the following: Direct labor cost 1,170,000 Depreciation on manufacturing plant and equipment Property taxes on plant Sales salaries. Delivery drivers Wages Plant ianitors wages 485,000 19,000 25,000 13,500 9,500 .. .\' - 57,000 hours PrintDone

Solution

Answer 1 Predetermined manufacturing overhead rate = Manufacturing overhead cost / Total machine hours = $570000 / 71250 machin hours = $8 per machine hour Answer 2 Manufacturing Overhead allocated to jobs during the year = Actual machine hours * Overhead rate = 57000 hours * $8 = $4,56,000 Answer 3 Manufacturing Overhead incurred during the year Depreciation on manufacturing plant and equipment $485,000 Property taxes on plant $19,000 Plant Janitors wages $9,500 Total Manufacturing Overhead incurred during the year $513,500 Manufacturing overheads are underapplied at the end of the year. Underapplied manufacturing overheads = Actual overheads - allocated overheads = $513500 - $456000 = $57,500 Answer 4 Jobs were undercosted by $57,500.