Question
Jax Company manufactures pipes and applies manufacturing costs to production at a budgeted indirect-cost rate of $12 per direct labor-hour. The following data are obtained
Jax Company manufactures pipes and applies manufacturing costs to production at a budgeted indirect-cost rate of $12 per direct labor-hour. The following data are obtained from the accounting records for June 2014:
Direct materials $350,000
Direct labor (16,000 hours @ $11/hour) 176,000
Indirect labor 20,000
Plant facility rent 100,000
Depreciation on plant machinery and equipment 44,000
Sales commissions 50,000
Administrative expenses 60,000
Required:
a. What actual amount of manufacturing overhead costs was incurred during June 2014?
b. What amount of manufacturing overhead was allocated to all jobs during June 2014?
c. For June 2014, was manufacturing overhead underallocated or overallocated? Explain.
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