Question: The Manic Machines Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year

The Manic Machines Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year the company expects fixed overhead costs to be $600,000 and variable costs to be $800,000. The expected machine hours are 6,000 and the expected direct labor hours are 80,000. The actual fixed overhead costs are $750,000 and the actual variable overhead costs are $775,000. The actual machine hours during the year are 5,500 and the actual direct labor hours are 90,000.

REQUIRED: a. How much overhead is allocated? b. What is the over/underabsorbed overhead? c. If the over(under) applied overhead is charged to Cost of Goods Sold, what is the effect of the amount calculated in (b) on Net Income?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Please help with this :) 1. REINFORCEMENT ACTIVITY 2, Part A, p. 406 1.Journalize Transactions 2.Purchases and Sales Journals 3.Cash Payments Journal 4.Cash Receipts Journal 5.Post Lines to Ledgers...

1. The controller of a small private college is complaining about the amount of work she is required to do at the beginning of each month. The president of the university requires the controller to...

1. The Talbott Company has received an order (#324) for 100 widgets. On January 20 the shop supervisor requisitioned 100 units of part 503 at a cost of $5 per unit and 500 units part 456 at a cost of...

1. The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year the company expects fixed overhead costs to be...

The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year, the company expects fixed overhead costs to be...

The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year the company expects fixed overhead costs to be...

The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year te company expects fixed overhead costs to be...

Refer to Exercise 14 for a description of a study about offering college students monetary rewards. Exercise 14 Would monetary rewards motivate you to pass more classes? In a two-semester study,...

Write an international business paper about the Irish economy

Referring to the Pell Corporation problem, what is the payback period? Group of answer choices 3 . 4 2 years None of the answers provided are correct 4 . 8 6 years 4 . 2 3 years 3 . 3 8 years The...

9. (15 points) A company is considering a new project that requires an investment of \$5 million. The project is expected to generate cash flows of $2 million in year 1,$3 million in year 2, and $4...

(Appendices) ENDING INVENTORY, COST OF GOODS SOLD, AND GROSS MARGIN. Wilson Company sells a single product. At the beginning of the year, Wilson had 120 units in stock at a cost of $8 each. During...

(Appendices) PURCHASES RECORDED GROSS. Dawson Enterprises uses the periodic system and records purchases gross. On a recent day, Dawson engaged in the following three transactions: LO2 a) Purchased...

(Appendices) PURCHASES RECORDED NET. Clean Wheels Car Wash purchased $54,200 (list price) of soap for its car-washing machines. The seller offered credit terms of 2/10, n/20. Clean Wheels records...