Answer:
26,500 Under applied
Explanation:
<em><u>Lock-Tite Company</u></em>
Actual Factory Overhead 215,000
Factory overhead Indirect materials 15,000
Indirect labor 80,000
Other overhead costs 120,000
Direct Labor = 345,000
Predetermined Overhead = 70% of $ 345,000= $ 241,500
Actual Overhead = $ 215,000
Difference = Predetermined Overhead - Actual Overhead
= 241,500- $ 215,000= 26,500 Under applied
We find the difference between actual overhead and applied overhead to find the underapplied ( overapplied overhead. If the actual overhead is less than applied overhead it is underapplied. But if the actual overhead is greater than applied overhead it is over applied.
Raw materials Opening $ 43,000
Add Materials Purchases 195000 ( 210,000 - 15000)
Less Raw materials Closing $ 52,000
Direct Materials Used 186,000
Direct Labor 345,000
FOH 215,000
Total Manufacturing Costs 746,000
Add Work in process Opening 10,200
Less Work in process Closing 21,300
Add Finished goods Opening 63,000
Less Finished goods Closing 35,600
Cost Of Goods Sold 762,300
