Modern Electronics Manufactures Surround Sound Systems and Applies Manufacturing Costs

question 266

Essay

Modern Electronics manufactures surround sound systems and applies manufacturing costs to production at a budgeted indirect-cost rate of $22 per direct-labour hour.The following data are obtained from the accounting records for August 20X9:
$\begin{array}{ll}\text { Direct materials } & \$ 350000 \\\text { Direct labour (7000 hours } @ \$ 15 / \text { hour) } & \$ 105000 \\\text { Ind irect labour } & \$ 15000 \\\text { Plant lease } & \$ 75000 \\\text { Depreciation on plant and equipment } & \$ 40000 \\\text { Marketing expense } & \$ 20000 \\\text { Plant utilities } & \$ 15000\end{array}$
Required
a.What actual amount of manufacturing overhead cost was incurred during August 20X9?
b.What amount of manufacturing overhead was allocated to all jobs during August 20X9?
c.For August 20X9,was manufacturing overhead underallocated or overallocated? Explain.
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Definitions:

Diffusion Of Responsibility

a socio-psychological phenomenon whereby individuals are less likely to take action or feel a sense of responsibility in the presence of a large group of people.

Obedience To Authority

The tendency to follow orders or directions from someone recognized as a figure of authority.

Social Facilitation

Social facilitation refers to the phenomenon where an individual's performance improves when performing tasks in the presence of others compared to when alone.

Pluralistic Ignorance

A psychological state in which the majority of group members privately reject a norm, but assume incorrectly that most others accept it, leading to a compliance with the norm.