An employee receives an hourly rate of $30, with time and a half for all hours worked in excess of 40 during a week. payroll dat
1 answer:
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Answer: B. The firm hires 45 workers and earns a $1,200.00 Economic Profit
Explanation:
If the Market Equilibrium rate is $105 then the company should hire 45 workers as shown in the table.
If they did that, revenue would be $7,425
Expenses would be wages and fixed costs:
= Wages + fixed costs
= (45 workers * wage rate) + 1,500
= (45 * 105) + 1,500
= $6,225
Economic profit would be:
= 7,425 - 6,225
= $1,200
Under- or Over-Applied Manufacturing Overhead:
Under- or Over-Applied Manufacturing Overhead refers to the balance in the manufacturing overhead control account after the actual overhead costs that were incurred and the applied overhead for the period has been recorded
1 .The appleid overhead is the predetermined rate of $2.40 per machine hour multiplied by the actual number of machine hours (75,000), so it is $180,000.
The applied overhead is debited to work-in-process inventory and credited to the manufacturing overhead account.
2. The underapplied or overapplied overhead for the year is the difference between the actual and applied overhead. We can show it in the T-account like this:
3. The company estimated its total overhead cost to be $192,000 and its total machine hours to be 80,000. The actual overhead cost was $184,000 and the actual machine hours were 75,000. We can see that the main reason why the manufacturing overhead was underapplied was the fact that it worked fewer machine hours than anticipated with a proportional decrease in the manufacturing overhead costs incurred. This is normal because an element of manufacturing overhead is fixed.
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