Examlex

Solved

New Age Electronics Manufactures Surround Sound Systems and Applies Manufacturing

question 97

Essay

New Age Electronics manufactures surround sound systems and applies manufacturing costs to production at a budgeted indirect-cost rate of $20 per direct-labor hour.The following data are obtained from the accounting records for August 2014:
 Direct materials $350,000 Direct labor (7,000 hours @$15 hour )$105,000 Indirect labor $25,000 Pant lease $75,000 Depreciation on plant and equipment $50,000 Marketing expense $20,000 Pant utilities $20,000\begin{array} { l l } \text { Direct materials } & \$ 350,000 \\\text { Direct labor } ( 7,000 \text { hours } @ \$ 15 \text { hour } ) & \$ 105,000 \\\text { Indirect labor } & \$ 25,000 \\\text { Pant lease } & \$ 75,000 \\\text { Depreciation on plant and equipment } & \$ 50,000 \\\text { Marketing expense } & \$ 20,000 \\\text { Pant utilities } & \$ 20,000\end{array} Required:
a.What actual amount of manufacturing overhead cost was incurred during August 2014?
b.What amount of manufacturing overhead was allocated to all jobs during August 2014?
c.For August 2014,was manufacturing overhead underallocated or overallocated? Explain.


Definitions:

Oil Rigs

Structures used for drilling wells to extract oil and gas from underground reservoirs.

Stockholders

Individuals or entities that own one or more shares of stock in a corporation, making them part owners of the company.

Bondholders

Individuals or entities that own bonds, which are debt securities issued by corporations or governments.

Corporation

A legal entity that is separate and distinct from its owners, providing them with limited liability and the ability to raise capital by selling shares.

Related Questions