Underapplied and Overapplied Overhead Cretin Enterprises uses a predetermined overhead rate of…


Question Description:

25

Underapplied and Overapplied Overhead Cretin Enterprises uses a predetermined overhead rate of… 1 answer below » Underapplied and Overapplied Overhead Cretin Enterprises uses a predetermined overhead rate of $21.40 per direct labor-hour. This pre- determined rate was based on a cost formula that estimated $171,200 of total manufacturing overhead for an estimated activity level of 8,000 direct labor-hours. The company incurred actual total manufacturing overhead costs of $172,500 and 8,250 total direct labor-hours during the period. Required: 1.       Determine the amount of underapplied or overapplied manufacturing overhead for the period. 2.    & View complete question » Underapplied and Overapplied Overhead Cretin Enterprises uses a predetermined overhead rate of $21.40 per direct labor-hour. This pre- determined rate was based on a cost formula that estimated $171,200 of total manufacturing overhead for an estimated activity level of 8,000 direct labor-hours. The company incurred actual total manufacturing overhead costs of $172,500 and 8,250 total direct labor-hours during the period. Required: 1.       Determine the amount of underapplied or overapplied manufacturing overhead for the period. 2.       Assuming that the entire amount of the underapplied or overapplied overhead is closed out to cost of goods sold, what would be the effect of the underapplied or overapplied overhead on the company’s gross margin for the period? View less » Dec 18 2015 12:06 PM

Answer

25