Question
The following information pertains to Trenton Glass Works for the year just ended. Budgeted direct-labor cost: 70,000 hours (practical capacity) at $16 per hour Actual
The following information pertains to Trenton Glass Works for the year just ended. Budgeted direct-labor cost: 70,000 hours (practical capacity) at $16 per hour Actual direct-labor cost: 80,000 hours at $17.50 per hour Budgeted manufacturing overhead: $997,500 Actual selling and administrative expenses: 434,000
Actual manufacturing overhead: Depreciation $ 235,000 Property taxes 20,000 Indirect labor 82,000 Supervisory salaries 202,000 Utilities 58,000 Insurance 32,000 Rental of space 302,000 Indirect material (see data below) 81,000 Indirect material: Beginning inventory, January 1 49,000 Purchases during the year 94,000 Ending inventory, December 31 62,000
1. Compute the firms predetermined overhead rate to 2 decimal places, which is based on direct-labor hours.
2. Calculate the overapplied or underapplied overhead for the year.
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