Free Essay

Acct. Week3

In: Business and Management

Submitted By Msteedawn1
Words 269
Pages 2
1

The Towson Manufacturing Corporation applies overhead on the basis of machine hours. The following divisional information is presented for your review: Find the unknowns for each of the divisions. Actual machine hours Estimated machine hours Overhead application rate Actual overhead Estimated overhead Applied overhead Over- (under-) applied overhead Division A 22,500 20,000 $4.50 110,000 90,000 101,250 ($8,750)

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Compute estimated overhead for Division A. 20,000 Estimated Machine Hours $4.50 x Application Rate $90,000 Estimated Overhead for Division A

2. Compute applied overhead for Division A. Actual Machine Hours x Application Rate Applied Overhead for Division A

22,500 $4.50 $101,250

3. Compute Over- (under-) applied overhead for Division A. 110,000 Actual Overhead 101,250 - Applied overhead ($8,750) Over / Under Applied Overhead for Division A 4. Compute actual machine hours for Division B. 86,000 Applied overhead $5.00 ÷ Application Rate $17,200 Actual Machine Hours for Division A 5. Compute estimated machine hours for Division B. 90,000 Estimated overhead $5.00 ÷ Application Rate $18,000 Actual Machine Hours for Division A 5. Compute actual overhead for Division B. Actual Overhead - Over / Under Applied overhead Actual Machine Hours for Division A 86,000 6,500 $79,500

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head on the basis of machine hours. The following divisional information

= You must input = Calculated automatically RED TEXT = Where the figures are derived from or failproof check

Division B $17,200 18,000 $5.00 $79,500 $90,000 $86,000 $6,500

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= D7 = D8

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