Question

The following data pertain to the Oneida Restaurant Supply Company for the year just ended.

Answer 1

Answer:

Predetermined overhead rate = Budgeted manufacturing rate/Allocation base

a. Machine hours

= 364,000 / 8,000

= $45.5

Predetermined overhead rate = $45.5

Direct-labor hours

= 364,000 / 20,000

= $18.2

Predetermined overhead rate = $18.2

Direct-labor dollars

Budgeted labor hours = 20,000 * $14 = $280,000

Predetermined overhead rate =  364,000 / $280,000 = $1.3

b. Machine hours

Manufacturing overhead applied = Actual machine hours * Predetermined overhead rate = $45.5 * 11,000 = $500,500

Over/Under applied overhead = 336,000 - 500,500

Over-applied overhead = $164,500

Direct-labor hours

Manufacturing overhead applied = Actual direct-labor hours * Predetermined overhead rate = $18.2 * 18,000 = $327,600

Over/Under applied overhead = 336,000 - 327,600

Under-applied overhead = $8400

Direct-labor dollars

Manufacturing overhead applied = Actual direct-labor hours * Actual direct-labor rate * Predetermined overhead rate

Manufacturing overhead applied = 18,000 * $15 * $1.3 = 351,000

Over/Under applied overhead = 336,000 - 351,000

Over-applied overhead = $15,000