Question

Moran, Inc., manufactures bricks. Each brick goes through 2 departments: Mixing and Firing. The company uses a job order cost system and computes a predetermined overhead rate for each department. The mixing department bases its rate on direct materials, and the firing department on machine hours. At the beginning of the year, the company made the following estimates: Mixing. Firing Direct Labor Hours 80,000 45,000 Machine Hours 30,000 70,000 Direct Materials $300,000 $40,000 Direct Labor $950,000 $700,000 Manufacturing overhead $150,000 $140,000 The cost sheet for Dr Milverton's order contained the following: Mixing Firing Direct Labor Hours 300 80 Machine Hours 80 120 Direct Materials $6,000 $120 Direct Labor $4,000 $1,400

Answer 1

Pageno Anghen! Particulars | Mixing Firing $262 $240 Actual overhead $2,800 - Applied overhead $ 3,000 overapplied / (underlag der $ 200 - applied) $ (22) working? Applied overhead over head applied for Mixing = Direct Materials x predeterminado H Rate = 6000 x0.50 . = 3,000 Poredetermined of rate - Manufacturing oH Direct Materials 150.000 300,000 = 0.50

Pageno@ over head applied for firing Pore determined on Rate Manutacturing out Machine Hourl 140,000 40000 overhead applied for firing = Machine hourę x por determined o H Rate = 120 x 2 = 240 the above table states that the actual oH incurred and the Oh applied is being compared. where Applied oh is greater than Actual oh, It is a case of overapplied overhead. Where Applied oH is lower than Actual.ch It is a cale of . underapplied overhead