Party Organiser Ltd

question 30

Essay

Party Organiser Ltd.allocates overheads to individual parties based on labour hours.At the beginning of the current year,estimated overhead costs were $3 000 000 and estimated labour hours were 1 200 000.By the end of the year,actual overhead costs were calculated to be $2 600 000 and actual labour hours were 1 050 000.
Required:
A Calculate the predetermined qverhead rate.
B. How much averhead wadd be applied to a particular job that required 200 labour hours?
C. How much total averhead was agplied during the year?
D. By how much was averhead aver- ar underapplied far the year? Be sure to indicate whether it was aver- or underagglied.

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Definitions:

Rent Expense

The cost incurred for leasing or renting property or equipment, considered an operating expense in accounting.

Supervision Expense

Supervision expense refers to the cost associated with overseeing and managing workers or operations within a business.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.

Manufacturing Overhead-Applied

The allocation of manufacturing overhead costs to individual products or job orders based on a pre-determined overhead rate.