Xyz ltd manufactures radio controlled cars and applies

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XYZ Ltd manufactures radio controlled cars and applies manufacturing costs to production at a budgeted indirect-cost rate of $22 per direct-labour hour. The following data are obtained from the accounting records for Jan 2013:

Direct materials $350,000
Direct labor (7,000 hours @ $15/hour) $105,000
Indirect labor $15,000
Plant lease $75,000
Depreciation on plant and equipment $40,000
Marketing expense $20,000
Plant utilities $15,000

a. What actual amount of manufacturing overhead cost was incurred during Jan 2013?

b. What amount of manufacturing overhead was allocated to all jobs during Jan 2013?

c. For Jan 2013, was manufacturing overhead under-allocated or over-allocated? Explain.

d. What are the implications for the company, based on your outcome for ‘c'?

Reference no: EM13587063

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