Question

XYZ CORP HAS THE FOLLOWING DATA: BUDGETED OVERHEAD $168,000 BUDGETED MACHINE HOURS (DRIVER) 35,000 ACTUAL MACHINE HOURS: JOB 17 11,700 JOB 18 9,750 JOB 19 13,650 JOB 20 3,900 JOBS 17, 18 & 19 WERE FINISHED. JOB 17 WAS SOLD. TOTAL ACTUAL OVERHEAD = $189,000. WHAT IS ACTUAL OVERHEAD IN FINISHED GOODS? (ASSUME OVERHEAD VARIANCE ALLOCATED AMONG WIP, FG AND COGS) ACTUAL OVERHEAD FG_________

Answer 1

Answer:

The Actual overhead in finished goods is $ 113,400

Explanation:

In order to calculate the ACTUAL OVERHEAD IN FINISHED GOODS we would have to use the following formula:

Actual overhead in finished goods= overheads allocated to job 18 and 19 + underapplied overheads allocated finished inventory

Actual overhead in finished goods=(($9,750+$13,650)/($11,700+$9,750+$13,650+$3,900)*$168,000) + ($23,400/$39,000* ($189,000 - ($39,000*$168,000/$35,000))

= $112,320 + $1,080

= $ 113,400

The Actual overhead in finished goods is $ 113,400