Additional Overhead Problems Problem 1. The following information pertains to Specialty Fittings Inc.

for 2002 Budgeted direct labor cost: Actual direct labor cost: 75,000 hours @ $16 per hour 80,000 hours @ $17.50 per hour $ 997,500 $1,002,000

Budgeted manufacturing overhead Actual manufacturing overhead

Required: a. Compute the firms predetermined overhead rate, which is based on direct labor hours. b. Calculate the over or under applied overhead for 2002 c. Prepare the journal entry necessary to close out the Manufacturing Overhead account. Assume that the amount of the over or under applied overhead is immaterial.

Problem 2 The following selected information was extracted from the cost records of Breitman Corporation. Depreciation, factory equipment Depreciation, factory building Rent, factory building Rent, office building Maintenance, factory building Depreciation, office building $ 17,000 13,000 30,000 15,000 10,000 9,000

Breitman calculates its predetermined overhead rate based on direct labor hours. Breitman estimates 20,000 direct labor hours Actual hours worked were 17,000 hours Actual Overhead cost amounted to $59,900. Required: a. Calculate Breitmans predetermined overhead rate. b. What is the amount of overhead applied to production by Breitman this period and determine whether overhead was over or under applied? c. Make the journal entry to close out the over or under applied overhead as determined above.

Problem 3 Foster estimate that its overhead rate for 2004 will be $3.00 and the activity base for 2004 will be 300,000 units. Required: a. Calculate the amount of Estimated overhead costs that the company projected for 2004. b. If 24,000 units of product were made in April 2004, how much overhead cost would be allocated to the Work in Process Inventory account during the month? c. If actual overhead costs in April were $70,000, would the overheard account be over or under applied for the month. By how much? d. What is the journal entry to close out the overhead account?