Fairfield company applies manufacturing overhead to products

Fairfield company applies manufacturing overhead to products at a predetermined rate of $50 per direct labo Item Direct materials Indirect materials Hourly labor wages Total Cost 60,000 Description Used on Jobs 101 and 102 Used on multiple jobs 750 hours @$30 per hour 200 hours for Job 101 = 300 hours for Job 102 = 250 hours for Job 103 30,000 5 6,000 9,000 7.500 22,500 Factory supervision Production engineer Factory janitorial work Seling: general and administrative salaries Other manufacturing overhead costs (factory rent insurance, depreciation etc.) Other seling. general and acministrative costs (office rent. insurance depreciation, etd.) 4,000 8.000 2.500 9,000 7,500 6.000 1. Post the preceding information to Faurfieid Company\'s Mtanufacturing Overhead Taccount. Manufacturing Overhead

Solution

1) Manufacturing overhead Indirect materials 30,000 37,500 Applied overhead Factory supervision 4,000 production engineer 8,000 factory janitorial work 2,500 other MOH 7,500 balance 52,000 37,500 Applied overhead is calculated as follows total direct labor *$50 750*50    = 37500 2) Manufacturing overhead underapplied 14500