Plastic Products Company Manufactures Pipes and Applies Manufacturing Costs to Production

question 79

Essay

Plastic Products Company manufactures pipes and applies manufacturing costs to production at a budgeted indirect-cost rate of $12 per direct labor-hour.The following data are obtained from the accounting records for June 2014:
$\begin{array}{lr}\text { Direct materials } & \$ 350,000 \\\text { Direct labor (16,000 hours @ } \$ 11 \text { hour) } & 176,000 \\\text { Indirect labor } & 20,000 \\\text { Plant facility rent } & 100,000 \\\text { Depreciation on plant machinery and equipment } & 40,000 \\\text { Sales commissions } & 50,000 \\\text { Administrative expenses } & 60,000\end{array}$ Required:
a.What actual amount of manufacturing overhead costs was incurred during June 2014?
b.What amount of manufacturing overhead was allocated to all jobs during June 2014?
c.For June 2014,was manufacturing overhead underallocated or overallocated? Explain.

---

Definitions:

Absolute Threshold

The minimum level of stimulus intensity needed for a stimulus to be detected.

Tolerance Level

The degree to which a person can accept or endure something, often referring to the acceptance of risk or the threshold of discomfort.

Sensory Adaptation

The process by which sensory receptors become less sensitive to constant stimuli, allowing individuals to focus on changes in their environment.

Subliminal Persuasion

A technique aiming to influence people's thoughts, feelings, or actions through stimuli that are below the threshold of conscious awareness.