Evaluate what is the under absorbed overhead

Reference no: EM1376281

1. The Talbott Company has got an order (#324) for 100 widgets. On 20th January the shop supervisor requisitioned 100 units of part 503 at a cost of $5 per unit and 500 units part 456 at a cost of $3 per unit to begin work on the 100 widgets. On the similar day 20 hours of direct labor at $20 per hour are used to work on the widgets. On 21st January, 200 units of part 543 at $6 per unit are requisitioned and 10 hours of direct labor at $15 per hour are performed on the 100 units of widgets to do the job. Overhead is allocated to the job based on $5 per direct labor hour.

Make a job order cost sheet for the 100 widgets

2. The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the starting of the year the company expects fixed overhead costs to be $600,000 and variable costs to be $800,000. The expected machine hours are 6,000, and the expected direct labor hours are 80,000. The actual fixed overhead costs are $700,000, and actual variable overhead costs are $750,000. The actual machine hours during year are 5,500, and the actual direct labor hours are 90,000.

a. Find how much overhead is allocated?

b. Evaluate what is the over/under absorbed overhead?

Reference no: EM1376281

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