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4 years ago

Adjusting factory overhead LO P4

Business

1 answer:

irga5000 [103]4 years ago

8 0

Answer:

26,500 Under applied

Explanation:

<em><u>Lock-Tite Company</u></em>

Actual Factory Overhead 215,000

Factory overhead Indirect materials 15,000

Indirect labor 80,000

Other overhead costs 120,000

Direct Labor = 345,000

Predetermined Overhead = 70% of $ 345,000= $ 241,500

Actual Overhead = $ 215,000

Difference = Predetermined Overhead - Actual Overhead

= 241,500- $ 215,000= 26,500 Under applied

We find the difference between actual overhead and applied overhead to find the underapplied ( overapplied overhead. If the actual overhead is less than applied overhead it is underapplied. But if the actual overhead is greater than applied overhead it is over applied.

Raw materials Opening $ 43,000

Add Materials Purchases 195000 ( 210,000 - 15000)

Less Raw materials Closing $ 52,000

Direct Materials Used 186,000

Direct Labor 345,000

FOH 215,000

Total Manufacturing Costs 746,000

Add Work in process Opening 10,200

Less Work in process Closing 21,300

Add Finished goods Opening 63,000

Less Finished goods Closing 35,600

Cost Of Goods Sold 762,300

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