4.1.PNG - Exercise 7-20 Predetennined Overhead Rates(LO T-3...

• Notes
• 1
• 100% (1) 1 out of 1 people found this document helpful

This preview shows page 1. Sign up to view the full content.

This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Exercise 7-20 Predetennined Overhead Rates (LO T-3) Southern Rim Parts estimates its manufacturing overhead to be \$495,000 and its direct labor costs to be \$900,000 forvear 1. The ﬁrst three jobs that Southern Rim worked on had actual direct labor costs of \$20,000 for Job 301, \$30,000 for Job 302, and \$40,000 for Job 303. For the year, actual manufacturing overhead was \$419,000 and total direct labor cost was \$850,000. Manufacturing overhead is applied to jobs on the basis of direct labor costs using predetermined rates. Required: a. How much overhead was assigned to each of the threejobs, 301, 302, and 303‘? Job 301 \$ 11,000 Job 302 15,500 Job 303 22,000 in. mm was the over- or underapplied manufacturing overhead for year 1? Explanation: a. _ . _ \$495,000 _ . Applrcatron rate. —\$900,000 — 55% of direct labor Job 301: \$ 20,000 x .55 = \$11,000 Job 302: 30,000 x .55 = 15,500 Job 303: 40,000 x .55 = 22,000 \$49,500 '— b. Total manufacturing overhead applied is \$46?,500 (= \$850,000 x 0.55) Underapplied overhead is \$11,500 {= \$4?9,000 — \$451500). ...
View Full Document

• Summer '10
• MATTSON

{[ snackBarMessage ]}

What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern