The following data pertain to the Aquarius Hotel Supply Company for the year just ended. Budgeted sales revenue.................................................................$945,000 Budgeted manufacturing overhead............................................... 650,000 Budgeted machine hours
The following data pertain to the Aquarius Hotel Supply Company for the year just ended.
Budgeted sales revenue.................................................................$945,000
Budgeted manufacturing overhead............................................... 650,000
Budgeted machine hours (based on practical capacity)................ 20,000
Budgeted direct-labor hours (based on practical capacity)........... 25,000
Budgeted direct-labor rate per hour.............................................. 13
Actual manufacturing overhead.................................................... 690,000
Actual machine hours.................................................................... 22,000
Actual direct-labor hours............................................................... 26,000
Actual direct-labor rate per hour................................................... 14
Required:
1. Compute the firm’s predetermined overhead rate for the year using each of the following common cost drivers:
(a) Machine hours,
(b) Direct-labor hours,
(c) Direct-labor dollars.
2. Calculate the overapplied or underapplied overhead for the year using each of the cost drivers listed above.
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