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Markswell Corp Uses a Budgeted Factory Overhead Rate to Apply

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Essay

Markswell Corp uses a budgeted factory overhead rate to apply overhead to production.The following data are available for the year ended December 31,2014.The company has budgeted factory overhead of $750,000,direct labor costs of $500,000,and direct labor hours of 15,000.The actual factory overhead incurred is $800,000,direct labor costs of 450,000,and direct labor hours of 17,000.
Required:
a.Determine the budgeted factory overhead rate based on direct labor-hours.
b.What is the applied overhead based on direct labor-hours?
c.Is overhead overapplied or underapplied? Explain.


Definitions:

Wilcoxon Signed Rank

The Wilcoxon Signed Rank Test is a non-parametric statistical test used to compare two related samples, matched samples, or repeated measurements on a single sample to assess differences in their population mean ranks.

Normally Distributed

Describes a statistical distribution that is symmetric around the mean, showing that data near the mean are more frequent in occurrence.

F-distribution

A probability distribution used in analysis of variance (ANOVA), depicting ratios of variances to assess the significance of group differences.

Kruskal-Wallis Test

A nonparametric method for testing whether samples originate from the same distribution, used when the assumptions of the ANOVA are not met.

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