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June 20X2 Manufacturing Overhead Analysis

Sunny Company manufactures pipes and budgets $15 per direct labor hour for manufacturing overhead costs. In June 2022, Sunny incurred $110,000 in actual overhead costs including indirect labor, plant rent, depreciation, and administrative expenses. It allocated $105,000 in overhead to production based on 7,000 direct labor hours at $15 per hour. Therefore, manufacturing overhead was underallocated for June 2022.

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Supratik Datta
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2K views1 page

June 20X2 Manufacturing Overhead Analysis

Sunny Company manufactures pipes and budgets $15 per direct labor hour for manufacturing overhead costs. In June 2022, Sunny incurred $110,000 in actual overhead costs including indirect labor, plant rent, depreciation, and administrative expenses. It allocated $105,000 in overhead to production based on 7,000 direct labor hours at $15 per hour. Therefore, manufacturing overhead was underallocated for June 2022.

Uploaded by

Supratik Datta
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

Sunny Company manufactures pipes and applies manufacturing overhead costs to

production at a budgeted indirect-cost rate of $15 per direct labor-hour. The following
data are obtained from the accounting records for June 20X2:
Direct materials
Direct labor (7,000 hours @ $11/hour)
Indirect labor
Plant facility rent Depreciation on plant machinery and equipment Sales commissions
Administrative expenses $280,000 $ 77,000 $ 20,000 $ 60,000 $ 30,000 $ 40,000 $
50,000
139) The actual amount of manufacturing overhead costs incurred in June 20X2 totals:
A) $557,000 B) $200,000 C) $110,000 D) $ 80,000
Answer: C Explanation: C) $20,000 + $60,000 + $30,000 = $110,000
140) The amount of manufacturing overhead allocated to all jobs during June 20X2
totals: A) $77,000 B) $105,000 C) $110,000 D) $200,000
Answer: B Explanation: B) 7,000 $15 per dlh = $105,000
141) For June 20X2, manufacturing overhead was: A) overallocated B) underallocated C)
neither overallocated nor underallocated D) indeterminable
Answer: B Explanation: B) Underallocated: Allocated only $105,000 (7,000 $15 per dlh)
of the $110,000 actual overhead Diff: 2 Terms: underallocated indirect costs Objective:
6 AACSB: Analytical skills

Sunny Company manufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of

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