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pshichka [43]
3 years ago
13

Kimble Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under-

or overapplication of overhead for the period: Estimated annual overhead cost $1,600,000 Actual annual overhead cost $1,575,000 Estimated machine hours 400,000 Actual machine hours 390,000.
Business
1 answer:
likoan [24]3 years ago
5 0

Answer:

overhead rate $4 per machien hour

applied overhead 1,560,000

The overhead was underapplied for 15,000

entry to adjust against COGS

Cost of Goods of sold   15,000 debit

            Factory overhead      15,000 credit

Explanation:

\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate

we divide the expected overhead over the total amount of budgeted machine hours to determinate the overhead rate:

1,600,000 / 400,000 =  $4 per machine hours

Actual machine hours 390,0000

applied overhead:

actual cost driver x  rate per driver

390,000 x $4 = 1,560.000‬ applied overhead

Actual overhead 1,575,000

As aplies is lower, we should adjust for 15,000 difference

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Communication skills refer to a manager’s ability to effectively convey ideas and information to others and to effectively receive ideas and information from others. This exercise focuses on communication skills as they involve deciding how to best convey information to others.

Exercise Background

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1.  The break even price per shirt is

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= $3 + $9

= $12

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= 8000 + 0.5 × 8000

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P = $2,700,000 - 4 × (100,000)  ÷  100,000

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