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Plastic Products Company Manufactures Pipes and Applies Manufacturing Costs to Production

Question 172

Essay

Plastic Products Company manufactures pipes and applies manufacturing costs to production at a budgeted indirect-cost rate of $12 per direct labor-hour.The following data are obtained from the accounting records for June 2014:
 Direct materials $350,000 Direct labor (16,000 hours @ $11 hour) 176,000 Indirect labor 20,000 Plant facility rent 100,000 Depreciation on plant machinery and equipment 40,000 Sales commissions 50,000 Administrative expenses 60,000\begin{array}{lr}\text { Direct materials } & \$ 350,000 \\\text { Direct labor (16,000 hours @ } \$ 11 \text { hour) } & 176,000 \\\text { Indirect labor } & 20,000 \\\text { Plant facility rent } & 100,000 \\\text { Depreciation on plant machinery and equipment } & 40,000 \\\text { Sales commissions } & 50,000 \\\text { Administrative expenses } & 60,000\end{array} Required:
a.What actual amount of manufacturing overhead costs was incurred during June 2014?
b.What amount of manufacturing overhead was allocated to all jobs during June 2014?
c.For June 2014,was manufacturing overhead underallocated or overallocated? Explain.

Correct Answer:

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a.$20,000 + $100,000 + $40,000...

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