Overhead Allocation
| Last Year’s Costs | Current Year’s Changes | |
| Machine hours | 38,000 | 45,858 |
| Overhead costs | ||
| Indirect materials | $ 58,000 | 30% |
| Indirect labor | 25,000 | 20% |
| Supervision | 41,000 | 10% |
| Utilities | 11,200 | 20% |
| Labor-related costs | 9,000 | 10% |
| Depreciation, factory | 10,500 | 10% |
| Depreciation, machinery | 27,000 | 20% |
| Property taxes | 3,000 | 20% |
| Insurance | 2,000 | 20% |
| Miscellaneous overhead | 5,000 | 10% |
| Total overhead | 191,700 |
| 1) | Projected Costs and Overhead Rate | ||
| Overhead costs | |||
| Indirect materials | $ 75,400 | ||
| Indirect labor | 30,000 | ||
| Supervision | 45,100 | ||
| Utilities | 13,440 | ||
| Labor-related costs | 9,900 | ||
| Depreciation, factory | 11,550 | ||
| Depreciation, machinery | 32,400 | ||
| Property taxes | 3,600 | ||
| Insurance | 2,400 | ||
| Miscellaneous overhead | 5,500 | ||
| Total overhead | $ 229,290 | ||
| Overhead rate | $ 5 | Per machine hour | |
| 2) | Overhead Applied | ||
| Job No. | Machine Hours | Overhead Cost | |
| H-142 | 7,840 | $ 39,200 | |
| H-164 | 5,260 | 26,300 | |
| H-175 | 8,100 | 40,500 | |
| H-201 | 10,680 | 53,400 | |
| H-218 | 12,310 | 61,550 | |
| H-304 | 2,460 | 12,300 | |
| Total | $ 233,250 | ||
| 3) | Over or Underapplied Overhead | ||
| Applied overhead | $ 233,250 | ||
| Actual overhead | 234,000 | ||
| underapplied overhead | (750) | ||
| Cost of goods sold should be increased by $750 to reflect the actual overhead cost | |||
| The point during this year when the overhead rate was computed | Beginning of the year | ||
| When it was applied | During the year | ||
| When the underapplied or overapplied over-head determined and the Cost of Goods Sold account adjusted to reflect actual costs | End of year | ||
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Question 
Overhead Allocation
Complete Chapter 16: P9
Overhead Allocation
I need help with the Accounting problem. Thank you
The following Exercises and/or Problems are required for the course.
Exercise(s) and/or Problem(s):
- Complete Chapter 16: P9
The textbook reading is from
- Financial and Managerial Accounting 10th Edition by Belverd E. Needles, Martin Powers, and Susan V Crosson
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