The following information relates to Burgundy for July 2020: Actual direct labour costs $50,000 Actual...
50.1K
Verified Solution
Link Copied!
Question
Accounting
The following information relates to Burgundy for July 2020:
Actual direct labour costs $50,000
Actual direct labour rate per hour $10
Factory overhead rate per direct labour hour $15
Factory overhead incurred $80,000
As part of the cost planning and cost control of operations and activities, management is concerned regarding the applied overhead rate used.
Required
Identify whether there is an underapplied or overapplied overhead. Assuming underapplied or overapplied overhead is transferred to cost of goods sold at the end of the period, which would be the adjustment to the cost of goods sold account? (4 marks)
Considering the company had budgeted a factory overhead of $90,000 and 6,000 hours of direct labour, identify whether there is a numerator and/or denominator reason leading to an underapplied or overapplied overhead, specifically for Burgundy. (4 marks)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
