The following information relates to Springhill Company: Budgeted Direct Labor Cost: 77,000 hours at $17/hr. Actual Direct

Question:

The following information relates to Springhill Company: Budgeted Direct Labor Cost: 77,000 hours at $17/hr. Actual Direct Labor Cost: 79,000 hours at $18/hr. Budgeted Manufacturing Overhead: $993,300 Actual Manufacturing Overhead: $997,000 Manufacturing Overhead Applied Based on Direct Labor Hours
a. Calculate Predetermined Overhead Rate __________
b. Calculate Under-or-Over-applied Overhead __________
c. Is it Under-applied or Over-applied? __________
d. What should we do with the amount of Under-or-Over-applied Overhead? Select the best answer from those below:
i. Adjust cost of goods sold or related inventory accounts ___
ii. Report it as a separate item on ___
iii. Do nothing-leave it in work in process ___
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...