PROBLEM: 1 (MUST SHOW CALCULATIONS; NO CALCULATIONS NO CREDIT)

BUDGETED DATA:

Budgeted machine hours 60,000 machine hours

Budgeted direct labor hours 400,000 direct labor hours

Budgeted direct labor costs $6,000,000

Budgeted manufacturing overhead costs $10,000,000

Company allocates manufacturing overhead using direct labor hours used

ACTUAL DATA:

Actual manufacturing overhead costs incurred $9,700,000

Actual machine hours used 62,000 machine hrs used

Actual direct labor hours used 380,000 actual DL hours used

Calculate budgeted (applied) manufacturing overhead rate per direct labor hour

$________________________

Calculate applied (allocated) manufacturing overhead:

$_________________________

Is the manufacturing overhead over or under-applied (circle one) OVER UNDER

And by how much? $_________________________

Close the overhead accounts assuming that the over or under applied amount is immaterial:

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