Filex Company Manufactures Pipes and Applies Manufacturing Overhead Costs to Production

question 61

Multiple Choice

Filex Company manufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $18 per direct labor-hour. The following data are obtained from the accounting records for June 2014:
$\begin{array}{lr}\text { Direct materials } & \$ 140,000 \\\text { Direct labor (4,000 hours @ } \$ 10 / \text { hour) } & 40,000 \\\text { Indirect labor } & 13,000 \\\text { Flant facility rent } & 30,000 \\\text { Depreciation on plant machinery and equipment } & 22,500 \\\text { Sales commissions } & 24,000 \\\text { Administrative expenses } & 28,000\end{array}$
-For June 2014,manufacturing overhead is ________.

• A) overallocated by $6,500
• B) underallocated by $21,500
• C) overallocated by $21,500
• D) underallocated by $6,500

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Definitions:

UNC

A standardized thread design used for bolts, nuts, and screws, characterized by a unified coarse pitch.

Proof Load

A specific load value, often used in testing, that a component or assembly can bear without permanent deformation or failure.

Tensile Strength

A measure of the maximum amount of stress a material can withstand while being stretched or pulled before breaking.

Minimum Yield Strength

The lowest stress at which a material begins to deform permanently, important in material selection for engineering.