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:
$$\begin{array} { l l } \text { Direct materials } & \$ 350,000 \\\text { Direct labor } ( 7,000 \text { hours } @ \$ 15 \text { hour } ) & \$ 105,000 \\\text { Indirect labor } & \$ 25,000 \\\text { Pant lease } & \$ 75,000 \\\text { Depreciation on plant and equipment } & \$ 50,000 \\\text { Marketing expense } & \$ 20,000 \\\text { Pant utilities } & \$ 20,000\end{array}$$ 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.

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Definitions:

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

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