Question

The following information pertains to Trenton Glass Works for the year just ended.

Budgeted direct-labor cost: 70,000 hours (practical capacity) at $16 per hour
Actual direct-labor cost: 80,000 hours at $17.50 per hour
Budgeted manufacturing overhead: $997,500
Actual selling and administrative expenses: 439,000
Actual manufacturing overhead:
Depreciation $ 233,000
Property taxes 23,000
Indirect labor 80,000
Supervisory salaries 202,000
Utilities 58,000
Insurance 32,000
Rental of space 301,000
Indirect material (see data below) 79,000
Indirect material:
Beginning inventory, January 1 48,000
Purchases during the year 95,000
Ending inventory, December 31 64,000
Calculate the overapplied or underapplied overhead for the year. (Round your intermediate calculations to 2 decimal places.)

Answer 1

Over-applied Overhead $134,000

Step-by-step explanation:

The computation of the overhead applied or under applied overhead is given below:

Depreciation $233,000

Property tax $21,000

indirect labor $80,000

Supervisory salaries $202,000

utilities $58,000

Insurance $32,000

Rental of space $301,000

Indirect material $79,000

Total OH incurred $1,006,000

OH applied $1,140,000

(80000 hours at 14.25 per hour) ($997,500 ÷ 70,000)

Over-applied Overhead $134,000