Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Sai Company uses a job order cost system and applies manufacturing overhead costs to jobs using a predetermined overhead rate based on direct labour-hours

Sai Company uses a job order cost system and applies manufacturing overhead costs to jobs using a predetermined overhead rate based on direct labour-hours

Accounting

Sai Company uses a job order cost system and applies manufacturing overhead costs to jobs using a predetermined overhead rate based on direct labour-hours. The following data were extracted from the company's accounting records for Year 6 Estimated Actual Manufacturing overhead costs $50,000 $54,000 Direct labour hours 20,000 hours 24,000 hours Job #461 was completed during the year and the following costs had been incurred on that job: Direct materials: $4,000 Direct labour: $1,500 (at $5.00 per direct labour hour)

 

 

 

How much of any underapplied or overapplied overhead would have been due to the fact

that the estimated overhead allocation base was different from the actual?

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

Predetermined Overhead Rate = Estimated Total Manufacturing Overhead / Estimated Total Direct Labor-Hours (DLHs)

= 50,000 / 20,000

= $2.50 per DLH

 

Job #461 Costs:

Manufacturing Overhead = 300 hours * 2.50 Per DLH = $750

 

Actual Overhead for 300 Hours = $54,000/24,000 hours*300 hours = $675

 

So, Manufacturing Overhead is overapplied to extent of ($750-$675) $75.