Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following information relates to Burgundy for July 2020: Actual direct labour costs $50,000 Actual direct labour rate per hour $10 Factory overhead rate per

The following information relates to Burgundy for July 2020:

Actual direct labour costs $50,000

Actual direct labour rate per hour $10

Factory overhead rate per direct labour hour $15

Factory overhead incurred $80,000

As part of the cost planning and cost control of operations and activities, management is concerned regarding the applied overhead rate used.

  1. Considering the company had budgeted a factory overhead of $90,000 and 6,000 hours of direct labour, identify whether there is a numerator and/or denominator reason leading to an underapplied or overapplied overhead, specifically for Burgundy. (4 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing and Assurance Services An Applied Approach

Authors: Iris Stuart

1st edition

73404004, 978-0073404004

More Books

Students also viewed these Accounting questions