Chloe Corp uses a job order costing system with manufacturing overhead applied to products on the basis
Question:
Chloe Corp uses a job order costing system with manufacturing overhead applied to products on the basis of direct labor hours. For the upcoming year, Chloe Corp estimated total manufacturing overhead cost at $652,800 and total direct labor hours of 40,800. During the year actual manufacturing overhead incurred was $620,200 and 40,500 direct labor hours were used.
(a) Calculate the predetermined overhead rate. (b) Calculate how much manufacturing overhead will be applied to production. (c) Is overhead over - or underapplied? By how much? (Input the amount as positive value.) (d) What account should be adjusted for over - or underapplied overhead? Should the balance be increased or decreased?
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips