Ridiculousness, Inc., has sales of $49,000, costs of $22,600, depreciation expense of $2,150, and interest expense of $1,900. If
1 answer:
You might be interested in
Answer: Lorein company's actual manufacturing overhead is greater than applied manufacturing overhead, so overhead has been under-applied to the extent of $100,000.
We have:
Estimated Manufacturing overhead = $650,000
Estimated Direct Labor hours = 130,000 hours
Actual Manufacturing Overhead = $650,000
Actual Direct Labor hours = 110,000 hours.
<u>Calculation of Estimated (Predetermined) Overhead rate:</u>
<u>Calculation of Applied manufacturing overhead:</u>
<u>Calculation of underapplied or overapplied manufacturing overhead:</u>
Under or over applied overhead = Actual Overhead - Applied Overhead
If actual overheads are less than applied overheads, then overheads have been over-applied.
If actual overheads are more than applied overheads, then overheads have been under-applied.
In this case,