New Age Electronics manufactures surround sound systems and allocates overhead costs using direct-labor hours. They pay their assembly line workers $15 per hour. Unadjusted Cost of Goods Sold for the year was $598,500. Estimated accounting information for the year is as follows: Overhead costs Direct materials $140,000 $355,000 Direct labor costs (7,000 hours @ $15/hour) $105,000 Direct labor hours Machine hours 7,000 8,000 Actual accounting information incurred for the year was as follows: Direct materials $350,000 Direct labor (7,100 hours @ $15/hour) $106,500 Production Manager's Salary $25,000 Customer 800# order line $ 2,000 Plant rent $ 75,000 Depreciation on plant and equipment $ 50,000 Marketing expense $ 20,000 Plant utilities Indirect materials Delivery expenses to customers $ 5,000 Depreciation on office equipment $5,000 Machine hours $ 19,000 $1,000 7,900 What amount of overhead was allocated/applied? What actual amount of overhead costs were incurred? Was overhead under or over allocated/applied and by how much? What is the adjusted Cost of Goods Sold amount?
New Age Electronics manufactures surround sound systems and allocates overhead costs using direct-labor hours. They pay their assembly line workers $15 per hour. Unadjusted Cost of Goods Sold for the year was $598,500. Estimated accounting information for the year is as follows: Overhead costs Direct materials $140,000 $355,000 Direct labor costs (7,000 hours @ $15/hour) $105,000 Direct labor hours Machine hours 7,000 8,000 Actual accounting information incurred for the year was as follows: Direct materials $350,000 Direct labor (7,100 hours @ $15/hour) $106,500 Production Manager's Salary $25,000 Customer 800# order line $ 2,000 Plant rent $ 75,000 Depreciation on plant and equipment $ 50,000 Marketing expense $ 20,000 Plant utilities Indirect materials Delivery expenses to customers $ 5,000 Depreciation on office equipment $5,000 Machine hours $ 19,000 $1,000 7,900 What amount of overhead was allocated/applied? What actual amount of overhead costs were incurred? Was overhead under or over allocated/applied and by how much? What is the adjusted Cost of Goods Sold amount?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Give me correct answer with explanation
Transcribed Image Text:New Age Electronics manufactures surround sound systems and allocates overhead costs using direct-labor hours. They
pay their assembly line workers $15 per hour. Unadjusted Cost of Goods Sold for the year was $598,500. Estimated
accounting information for the year is as follows:
Overhead costs
Direct materials
$140,000
$355,000
Direct labor costs (7,000 hours @ $15/hour) $105,000
Direct labor hours
Machine hours
7,000
8,000
Actual accounting information incurred for the year was as follows:
Direct materials
$350,000
Direct labor (7,100 hours @ $15/hour)
$106,500
Production Manager's Salary $25,000
Customer 800# order line $ 2,000
Plant rent $ 75,000
Depreciation on plant and equipment $ 50,000
Marketing expense $ 20,000
Plant utilities
Indirect materials
Delivery expenses to customers $ 5,000
Depreciation on office equipment $5,000
Machine hours
$ 19,000
$1,000
7,900
What amount of overhead was allocated/applied?
What actual amount of overhead costs were incurred?
Was overhead under or over allocated/applied and by how much?
What is the adjusted Cost of Goods Sold amount?
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education