Calculate the amount of underapplied or overapplied


Broucek Inc. makes baby furniture from fine hardwoods. The company uses a job-order costing system and predetermined overhead rates to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Preparation Department is based on machine hours, and the rate in the Fabrication Department is based on direct labor-hours. At the beginning of the year, the company's management made the following estimates for the year:

  

Department

   Preparation Fabrication
  Machine-hours 83,000    32,000   
  Direct labor-hours 33,000    57,000   
  Direct materials cost $194,000    $204,000   
  Direct labor cost $280,000    $521,000   
  Fixed manufacturing overhead cost $207,500    $518,700   
  Variable manufacturing overhead per machine-hour $3.00    -      
  Variable manufacturing overhead per direct labor-hour -       $5.00   

Job 135 was started on April 1 and completed on May 12. The company's cost records show the following information concerning the job:

  

Department

   Preparation Fabrication
  Machine-hours 360      67     
  Direct labor-hours 80      133     
  Direct materials cost $940      $1,120     
  Direct labor cost $690      $970     

Required:
1.

Compute the predetermined overhead rate used during the year in the Preparation Department. Compute the rate used in the Fabrication Department. (Round your answers to 2 decimal places.)


      Predetermined Overhead Rate
  Preparation department $   per MH
  Fabrication department $   per DLH

2.

Compute the total overhead cost applied to Job 135. (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount.)

  Total overhead cost $   
3-a.

What would be the total cost recorded for Job 135? (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount.)


Department



      Preparation       Fabrication    Total
  Direct materials $ $ $   
  Direct labor

  
  Manufacturing overhead

  
  


  Total cost

$

$

$   

  



3-b.

If the job contained 29 units, what would be the unit product cost? (Round "Predetermined overhead rate" and final answer to 2 decimal places and other intermediate calculations to the nearest dollar amount.)

  Unit product cost $  per unit
4.

At the end of the year, the records of Broucek Inc. revealed the following actual cost and operating data for all jobs worked on during the year:

  

Department

   Preparation Fabrication
  Machine-hours 82,700      24,800     
  Direct labor-hours 28,000      53,000     
  Direct materials cost $165,800      $412,000     
  Manufacturing overhead cost $464,550      $711,400     


What was the amount of underapplied or overapplied overhead in each department at the end of the year?(Input all amounts as positive values. Do not round your intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Select "None" for no effect (i.e., zero variance).)

  
  Preparation Department   (Click to select)Underapplied overheadNoneOverapplied overhead $   
  Fabrication Department   (Click to select)Overapplied overheadUnderapplied overheadNone $   

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Accounting Basics: Calculate the amount of underapplied or overapplied
Reference No:- TGS0679564

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