The Alphonse Company Allocates Fixed Overhead Costs by Machine Hours

question 24

Essay

The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year the company expects fixed overhead costs to be $600,000 and variable costs to be $800,000. The expected machine hours are 6,000 and the expected direct labor hours are 80,000. The actual fixed overhead costs are $700,000 and the actual variable overhead costs are $750,000. The actual machine hours during the year are 5,500 and the actual direct labor hours are 90,000.
Required:
a. How much overhead is allocated?
b. What is the over/under-absorbed overhead?

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Definitions:

Electric Shock

A sudden discharge of electricity through a part of the body, which can be used therapeutically or may occur accidentally.

Scoldings

Verbal reprimands or expressions of disapproval, often used as a form of discipline or correction.

Negative Reinforcement

Negative reinforcement involves the removal of an unpleasant stimulus to increase the likelihood of a particular behavior being repeated.

Removal

The act or process of taking something away or eliminating it.