Answer the following questions using the information below:
Philadelphia Company manufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $15 per direct labor-hour. The following data are obtained from the accounting records for June 2010:

-For June 2010, manufacturing overhead was:

Question

Answer the following questions using the information below:
Philadelphia Company manufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $15 per direct labor-hour. The following data are obtained from the accounting records for June 2010:
 
-For June 2010, manufacturing overhead was:

Quizplus · Accepted Answer

The actual manufacturing overhead cost incurred in June was $60,000, which is less than the amount of manufacturing overhead applied to production ($75,000 calculated by multiplying the budgeted indirect-cost rate of $15 by the actual direct labor-hours of 5,000). This means that manufacturing overhead was underallocated in June, as the actual costs were lower than the budgeted amount.

Answer the Following Questions Using the Information Below