New Age Electronics manufactures surround sound systems andallocates overhead costs using direct-labor hours. They pay theirassembly line workers $15 per hour. Unadjusted Cost of Goods Soldfor the year was $598,500. Estimated accounting information for theyear is as follows:
Overhead costs $140,000
Direct materials $355,000
Direct labor costs (7,000 hours @ $15/hour) $105,000
Direct labor hours 7,000
Machine hours 8,000 Actual accounting information incurred forthe year was as follows:
Direct materials $350,000
Direct labor (7,100 hours @ $15/hour) $106,500
Production Manager’s Salary $ 25,000
Customer 800# order line $ 2,000
Plant rent $ 75,000
Depreciation on plant and equipment $ 50,000
Marketing expense $ 20,000
Plant utilities $ 19,000
Indirect materials $ 1,000
Delivery expenses to customers $ 5,000
Depreciation on office equipment $ 5,000
Machine hours 7,900
What actual amount of overhead costs were incurred?
Was overhead under or over allocated/applied and by howmuch?
$28,000 under-allocated/applied $30,000 under-allocated/applied$28,000 over-allocated/applied $30,000 over-allocated/applied
What is the adjusted Cost of Goods Sold amount?
