Acme Fireworks uses a traditional overhead allocation based on - 25920

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  • From: Business,
  • Posted on: Tue 24 Sep, 2013
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Request Description

Acme Fireworks uses a traditional overhead allocation based on direct labor hours. For the current year overhead is estimated at $1,000,000 and direct labor hours are budgeted at 200,000 hours. Actual hours worked were 195,000 and actual overhead was $978,000. 

 

 

(a) Compute the predetermined manufacturing overhead rate.

(b) Compute the applied manufacturing overhead.

(c) Compute the amount of over/under applied manufacturing overhead. 

Solution Description

a)Predetermined Manufacturing overhead rate=Estimated Overhead/Budgeted Labour Hours

 

                                                                 =$1000,000/200,000