Overhead Allocation

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)
	The 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, the account is adjusted to reflect actual costs			End of year

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Overhead Allocation

Complete Chapter 16: P9

I need help with the Accounting problem. Thank you

The following Exercises and 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 10^th Edition by Belverd E. Needles, Martin Powers, and Susan V Crosson