Question
CHAMPION Manufacturing Company uses a normal costing system. The activity base for all overhead costs is direct labor hours. All goods which were produced during
CHAMPIONManufacturing Company uses a normal costing system. The activity base for all overhead costs is direct labor hours. All goods which were produced during the period were completed and sold during the period. Costs of manufacturing and non-manufacturing for the current period are:
|
| Estimated | Actual |
| Fixed selling expenses | $200,000 | 250,000 |
| Number of units produced | 1,000 | 1,800 |
| Administrative expenses | $500,000 | 500,000 |
| Direct labor | $128,000 | 240,000 |
| Direct materials | $125,000 | 120,000 |
| Direct labor hours | 3,000 | 5,000 |
| Indirect labor | $130,000 | 135,000 |
| Indirect materials | $200,000 | 110,000 |
| Other factory overhead | $100,000 | 350,000 |
| Variable selling expenses | $140,000 | 121,000 |
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Required:
Calculate Pre-determined Overhead Rate,
Calculate Applied Manufacturing overhead (MOH),
Calculate the cost of 1 unit of the product (cost/unit),
Calculate Over/underapplied Manufacturing overhead
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