Question

The estimated factory overhead cost for a Co. is $1750000 for the year. Direct labor hours are estimated to be 500000. Determine: SHOW ALL WORK a. Predetermined factory overhead rate. $ b. Determine the factory overhead applied assume the actual direct labor hours for Job 50 was. 20000 and for J0b 51 was 24000 . c. Determine the balance in the factory overhead account assuming that the actual cost incurred was $153000. d. Over or under-applied

Answer 1

Answer:

Results are below.

Explanation:

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 1,750,000 / 500,000

Predetermined manufacturing overhead rate= $3.5 per direct labor hour

Now, we can allocate overhead to Job 50 and 51:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Job 50:

Allocated MOH= 3.5*20,000

Allocated MOH= $70,000

Job 51:

Allocated MOH= 3.5*24,000

Allocated MOH= $84,000

Finally, the under/over applied overhead:

(We weren't provided with enough information)

Under/over applied overhead= real overhead - allocated overhead