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Exercise #6: A small manufacturer uses machine-hours as its activity base for assigned overhead costs to jobs. The company estimated the following amounts for 2018
Exercise #6: A small manufacturer uses machine-hours as its activity base for assigned overhead costs to jobs. The company estimated the following amounts for 2018 for the company and for Job X195:
Company Job X195
Direct materials $60,000 $4,000
Direct labor $25,000 $2,500
Manufacturing overhead costs $54,000
Machine hours 90,000 1,350
During 2018, the actual machine-hours totaled 94,000, and actual overhead costs were $53,000.
Instructions
- Compute the predetermined overhead rate. Show calculations!
- Compute the total manufacturing costs for Job X195. Show your calculations!
- How much overhead is over or underapplied for the year for the company? State amount and whether it is over- or underapplied. Show calculations
- If the Manufacturing Company sells Job X195 for $14,000, compute the gross profit.
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