Question

Estimated manufacturing overhead for the year $ 32,550 Estimated direct labor hours for the year 2,100 Two jobs were worked on during the year: Job A-101 and Job A-102. The number of direct labor-hours spent on Job A-101 and Job A-102 were 1,230 and 1,050, respectively. The actual manufacturing overhead was $39,000. What is the amount of the under- or overapplied manufacturing overhead? Overhead is applied on the basis of direct labor hours. $2,610 overapplied. $3,660 underapplied. $870 underapplied. $6,450 overapplied.

Answer 1

Underapplied for 3,660

Step-by-step explanation:

MO 32,550

DLH 2,100

rate: MO/DLH = 32,550/2,100 = 15.5 MO per DLH

Applied MO:

• job 101 : 1,230 hours x 15.5 = 19,065

• job 102: 1,050 hours x 15.5 = 16,275

Total MO 19,065 + 16,275 = 35,340

Actual Overhead 39,000

Underapplied for 3,660