Reference no: EM132633734
The following information about Chachi Company's budgeted overhead are as follows:
Variable overhead @ 2,000 direct labor hours $150,000
Fixed overhead @ 2,000 direct labor hours $100,000
Chachi uses normal costing in accounting for the factory overhead with a predetermined rate based on direct labor hours. They use the flexible budgets in order to calculate the predetermined rate. Actual labor hours worked during the current period is 1,700 hours.
The following information pertains to the costs actually incurred by Chachi during the current period:
Depreciation expense, machine $40,000
Depreciation expense, factory $10,000
Direct materials $100,000
Indirect labor $60,000
Indirect materials $20,000
Marketing manager's salary,
net of 15% part-time salary in
factory supervision $85,000
Utilities expense, 70% of which
is related to factory $50,000
Office supplies $15,000
Miscellaneous factory expense $35,000
Administrative salaries, 5% are
related to part-timers in
quality inspection $120,000
Required:
Question 1: How much is the applied overhead?
Question 2: How much is the actual overhead incurred?
Question 3: How much is the under- or overrapplied overhead during the current period?