Maurice Tutor

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    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 24 Aug 2017 My Price 6.00

Cretin Enterprises

Underapplied and Overapplied Overhead

Cretin Enterprises uses a predetermined overhead rate of $21.40 per direct labor-hour. This pre- determined rate was based on a cost formula that estimated $171,200 of total manufacturing overhead for an estimated activity level of 8,000 direct labor-hours.

The company incurred actual total manufacturing overhead costs of $172,500 and 8,250 total direct labor-hours during the period.

Required:

1.       Determine the amount of underapplied or overapplied manufacturing overhead for the period.

2.       Assuming that the entire amount of the underapplied or overapplied overhead is closed out to cost of goods sold, what would be the effect of the underapplied or overapplied overhead on the company’s gross margin for the period?

Answers

Maurice Tutor
(5)
Status NEW Posted 24 Aug 2017 10:08 PM My Price 6.00

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