Solution-How does the applied overhead relate to the actual

How does the applied overhead relate to the actual overhead

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Reference no: EM131785193

Assignment

Ekpro Products manufactures containment chambers for environmentally friendly incinerators. Each chamber is built to customer specifications. Most of the direct labor time is spent on welding activities. Following is the job cost sheet for an incinerator manufactured for Benzate Corporation:

Ekpro				Job Cost Sheet
Job:	Benzate
		Direct Labor			Direct Material			Applied Overhead			Total
		Hours	Rate	Total	Qty	Cost Per Unit	Total	Qty	Rate	Total	Total
May 8, 20X7
Rod Burner		9	$25	$ 225							$ 225
Sandy Sharp		1	$12	$ 12							$ 12
Steel					10	$ 80	$ 800				$ 800
May 9, 20X7
Sandy Sharp		2	$12	$ 24							$ 24
Applied Overhead								?	?	$ 360	$ 360
		12		$ 261			$ 800			$ 360	$1,421

(a) What types of costs do you imagine would be included in factory overhead? If overhead is applied based on direct labor hours, what is the application rate?

(b) Ekpro is considering installation of a robotic machine that will do all welding operations. How might this decision impact the total overhead and the application method?

(c) How does the applied overhead relate to the actual overhead? When they are not the same, what happens to the difference? Why is actual overhead not assigned to each job?

Reference no: EM131785193

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How does the applied overhead relate to the actual overhead

Reference no: EM131785193

Reference no: EM131785193

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