Determine the manufacturing overhead rate

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Reference no: EM131263926

Sports Unlimited makes softballs and baseballs for recreational use. It takes them 2.0 direct labor hours to make a softball and 1.5 direct labor hours to make a baseball. Budgeted production for the upcoming year is 15,000 softballs and 18,000 baseballs. Budgeted fixed overhead is $185,000 with a variable rate of overhead of $3.00 per direct labor hour.

Actual direct labor hours for job #257 is 2,100 direct labor hours. Actual direct labor hours used for the year are 35,080 DLH for softballs and 25,600 DLH for baseballs. Actual manufacturing overhead incurred was $382,500.

Required:

a. Determine the manufacturing overhead rate.

b. Determine the amount of manufacturing overhead applied to job #257.

c. Determine the amount of under/overapplied manufacturing overhead for the year.

d. What effect does the under/overapplied manufacturing overhead have on cost of goods sold and net income for the year?

Reference no: EM131263926

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