Question

Denominator hours for May 15,000 Actual hours worked during May 14,000 Standard hours allowed for May 12,000 Flexible budget fixed overhead cost $45,000 Actual fixed overhead costs for May $48,000 Danske Company had total underapplied overhead of $15,000. Additional information is as follows: Variable Overhead: Applied based on standard direct labor hours allowed $42,000 Budgeted based on standard direct labor hours 38,000 Fixed Overhead: Applied based on standard direct labor hours allowed $30,000 Budgeted based on standard direct labor hours 27,000 What is the actual total overhead for the period?

Answer 1

$87,000

Step-by-step explanation:

As per given data

Actual hours = 15,000 hours

Standard hours = 14,000 hours

Standard hours allowed = 12,000 hours

Flexible budget fixed overhead cost = $45,000

Actual fixed overhead costs = $48,000

Underapplied overhead = $15,000

Variable Overhead:

Applied based on standard direct labor hours allowed = $42,000

Budgeted based on standard direct labor hours = 38,000 hours

Fixed Overhead:

Applied based on standard direct labor hours allowed = $30,000

Budgeted based on standard direct labor hours = 27,000 hours

Total Overhead is the sum of all the variable and fixed overheads applied to the products and under / over applied overheads.

Applied overheads are the amount of overheads applied using actual activity and standard rate.

Actual Overheads = Applied variable overheads + Applied fixed overheads + under applied overheads

Placing values in the formula

Actual Overheads = $42,000 + $30,000 + $15,000

Actual Overheads = $87,000