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Required: Determine The Amount of Underapplied or Overapplied Overhead For The Period

This document contains 3 problem solving questions related to manufacturing overhead. The first question asks to calculate the underapplied or overapplied overhead for a period based on actual vs applied overhead. The second asks to calculate the predetermined overhead rate and applied overhead to a specific job order. The third asks to calculate the overapplied or underapplied overhead based on actual vs total applied overhead for the month.

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1K views1 page

Required: Determine The Amount of Underapplied or Overapplied Overhead For The Period

This document contains 3 problem solving questions related to manufacturing overhead. The first question asks to calculate the underapplied or overapplied overhead for a period based on actual vs applied overhead. The second asks to calculate the predetermined overhead rate and applied overhead to a specific job order. The third asks to calculate the overapplied or underapplied overhead based on actual vs total applied overhead for the month.

Uploaded by

SnapShop by AJ
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
  • Problem Solving Exercise

PROBLEM SOLVING (4 items x 5 points)

Perform what is being asked. Write your answers on a separate sheet of paper.

1. Mac Manufacturing uses a predetermined overhead rate of P19.10 per direct labor-hour. This predetermined rate was
based on a cost formula that estimates P246,390 of total manufacturing overhead for an estimated activity level of
12,900 direct labor-hours. The company incurred actual total manufacturing overhead costs of P245,000 and 12,400
total direct labor-hours during the period.

Required: Determine the amount of underapplied or overapplied overhead for the period.

Applied overhead = predeterminded rate x actual hours


= 19.10 X 12,400
= 236,840

Actual 245,000
Applied 236,840
Underapplied 8,160

2. Mac, Inc. expects to assemble 20,000 units of laptop computers this coming month. The amount of manufacturing
overhead incurred is estimated to be P1,100,000. The number of direct labor hours is estimated to be 4,000 hours.
Mac, Inc. is currently using direct labor hours as the single allocation base to apply manufacturing overhead to the
jobs. Mac, Inc. receives a job order that requires labor work of 200 hours.

Required:
a. Calculate the predetermined overhead rate used to apply manufacturing overhead.
Estimated overhead cost/ Estimated hours
Estimated Cost 1,100,000.00
Estimated Hours 4,000
Predetermined Overhead rate 275.00

b. Based on item #1, calculate how much of manufactured overhead should be applied to this specific order.

Predetermined rate x Actual hours


Predetermined rate 275.00
Actual hours 200
Applied manufacturing overhead 55,000.00

c. The amount of actual manufacturing overhead incurred is P1,200,000 at the end of this month. The amount of
applied manufacturing overhead during this month is P1,050,000. Calculate the overapplied or underapplied
manufacturing overhead.

Actual overhead – Applied overhead


Actual overhead 1,200,000
Applied overhead 1,050,000
Underapplied overhead 150,000

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