Denver Company prints custom training materials for corporations. The business was started on January 1, 2013 and uses a job-order costing system. Manufacturing overhead is applied to jobs based on prime cost (direct materials and direct labor costs).The following information is available for 2013:Estimated Manufacturing Overhead Costs : $315,000Estimated Direct Material Costs : $150,000Estimated Direct Labor Costs : $225,000Actual Direct Materials Cost : $148,500Actual Direct Labor Cost : $213,500Actual Manufacturing Overhead Cost : 318,500
Required:1. What is the under applied or overapplied overhead cost for Denver Company?
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Ответ:
Over/under allocation= $14,420 underallocated
Explanation:
Giving the following information:
Manufacturing overhead is applied to jobs based on prime cost (direct materials and direct labor costs).
The following information is available for 2013:
Estimated Manufacturing Overhead Costs : $315,000
Estimated Direct Material Costs : $150,000
Estimated Direct Labor Costs : $225,000
Actual Direct Materials Cost : $148,500
Actual Direct Labor Cost : $213,500
Actual Manufacturing Overhead Cost : 318,500
First, we need to calculate the predetermined overhead rate:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 315,000/(150,000 + 225,000)= $0.84 per prime cost dollar
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 0.84* (148,500 + 213,500)= $304,080
To determine under or over allocation, we need to use the following formula:
Over/under allocation= real MOH - allocated MOH
Over/under allocation= 318,500 - 304,080= 14,420 underallocated
Ответ:
3 times per year
Explanation:
ROI = Profit/Sales * Sales/Asset
30% = 1,050,000/10500000 * Asset Turnover
30% = 10% * Asset Turnover
Asset Turnover = 30%/10%
Asset Turnover = 3 times per year