Aggregator Industries does cement pouring jobs for homes and businesses. Below is information related to its Overhead application: Estimated Overhead Cost $ 240,000 Estimated Direct Labor Hours 29,000 Actual Direct Labor Hours 31,587 Estimated Machine Hours 74,000 Actual Machine Hours 68,541 Depreciation of Mixing Equipment $ 48,000 Depreciation of Pouring Equipment $ 52,000 Fuel for Cement Truck $ 3,900 Factory Supervisor Salaries $ 104,000 Advertising Expense $ 2,850 Rent Expense for Cement Yard $ 23,000 Required: 1. Determine the Predetermined Overhead Rate if the Cost Driver is Direct Labor Hours. 2. Calculate the Over/Underapplied Overhead. 3. Create a journal entry to dispose of the Over/Underapplied Overhead. 4. Repeat steps 1-3, but with Machine Hours as the Cost Driver.
Aggregator Industries does cement pouring jobs for homes and businesses. Below is information related to its Overhead application: Estimated Overhead Cost $ 240,000 Estimated Direct Labor Hours 29,000 Actual Direct Labor Hours 31,587 Estimated Machine Hours 74,000 Actual Machine Hours 68,541 Depreciation of Mixing Equipment $ 48,000 Depreciation of Pouring Equipment $ 52,000 Fuel for Cement Truck $ 3,900 Factory Supervisor Salaries $ 104,000 Advertising Expense $ 2,850 Rent Expense for Cement Yard $ 23,000 Required: 1. Determine the Predetermined Overhead Rate if the Cost Driver is Direct Labor Hours. 2. Calculate the Over/Underapplied Overhead. 3. Create a journal entry to dispose of the Over/Underapplied Overhead. 4. Repeat steps 1-3, but with Machine Hours as the Cost Driver.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Aggregator Industries does cement pouring jobs for homes and businesses. Below is information related to its Overhead application:
Estimated Overhead Cost $ 240,000
Estimated Direct Labor Hours 29,000
Actual Direct Labor Hours 31,587
Estimated Machine Hours 74,000
Actual Machine Hours 68,541
Depreciation of Mixing Equipment $ 48,000
Depreciation of Pouring Equipment $ 52,000
Fuel for Cement Truck $ 3,900
Factory Supervisor Salaries $ 104,000
Advertising Expense $ 2,850
Rent Expense for Cement Yard $ 23,000
Required:
1. Determine the Predetermined Overhead Rate if the Cost Driver is Direct Labor Hours.
2. Calculate the Over/Underapplied Overhead.
3. Create a journal entry to dispose of the Over/Underapplied Overhead.
4. Repeat steps 1-3, but with Machine Hours as the Cost Driver.
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