Question

A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $482,910 and direct labor hours would be 48,291. Actual factory overhead costs incurred were $520,224, and actual direct labor hours were 54,190. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year?

a. $58,990 underapplied b. $21,676 overapplied c. $541,900 overapplied d. $21,676 underapplied

A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $338,200 and direct labor hours would be 45,600. Actual manufacturing overhead costs incurred were $309,300, and actual direct labor hours were 51,700. What is the predetermined overhead rate per direct labor hour?

a.$8.90

b.$11.13

c.$5.93

d.$7.42

Answer 1

A	Particulars	Budgeted Overhead	Actual Overhead	Actual Overhead as per Budgeted Overhead Rate	Overapplied Overhead
	Factory Overhead Costs	$482,910	$520,224	$541,900	$21,676
	Direct Labour Hours	48,291	54,190
	Overhead Rate	10.00	9.60

B	Particulars	Budgeted Overhead	Actual Overhead	Predetermined Overhead Rate
	Factory Overhead Costs	$338,200	$309,300
	Direct Labour Hours	45,600	51,700
	Overhead Rate	7.42	5.98	7.42