Exercise 4-19

Kim-Brooks, Inc. makes costumes for movies and television shows. Brooks Kimberly, the companys owner, prepared the following estimates for the upcoming year:

Manufacturing overhead cost		$800,000
Direct labor hours		50,000
Direct labor cost		$250,000
Machine hours		40,000

(a) Assume that Kim-Brooks applles manufacturing overhead on the basis of direct labor hours, During the year, 49,800 direct labor hours were worked. How much overhead was applied to work in process? If actual manufacturing overhead for the year was $792,000, was overhead under or overapplied during the year? 0 ho much? For computation purposes round overhead rates to 2 decimal places, e g. 52.75. Round ??nal answers to 0 decinal places, e g 5,275 Applied Overhead ndwrapplOverhead $ (b) Assume that Kim-Drocks applies manufacturing overhead on the basis of direct labor cost. During the year, $245,000 in direct labor cost was inourred. How much overhead was applied to work in process during the yer? If actual manufacturing overhead for the year was $792,000, w as uverhead under Applied Overhead underappled Overhead ut uverap led durin the year? By how much? or computa purposes ruund overhedd rates to 2 dec mdl places, e. 52.75% Round lildl dllswers o 0 decimal places ee 5 275 (c) Assune that Kim-Bruoks applies manufacturing overhead on the basis of machine hours. During the ya, 40,200 machine hours were worked. How much averhead was applied to work i process during the year? If actual manufacturing uverhead for the year was $792 aowas averhead under or ave rapp led during the year? Hy how much? For computation purposes round overhead rates to 2 decimal places e g. 52./5 Round final answ rs dec mial p aces, e g 5 275 o Applied Overhead