Dixies delightful doo-dads manufactures decorative boxes, Ask an Expert

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Dixie's Delightful Doo-Dads manufactures decorative boxes. The primary materials (wood, brass and glass) and direct labor are directly assigned to the products. Manufacturing overhead costs are applied based on direct labor hours. Data for 2016 follows: Estimated Actual Machine hours 21,700 25,300 Direct labor hours 26,500 27,100 Maintenance labor on factory equipment $ 12,000 $ 29,500 Plant supervisor's salary 43,000 49,000 Screws, nails, adhesive 23,000 26,400 Plant utilities 49,000 58,150 Delivery costs to ship to customer 35,000 41,500 Property taxes on production facility 85,000 84,000 Advertising of product 44,000 54,000

a. Compute the firm's predetermined overhead rate.

b. How much overhead was applied to 2016 production?

c. At the end of 2016, was overhead over or under applied? By how much?

d. Given your answer to ‘c', what account is adjusted? Is the adjustment an increase or decrease to the account?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92640749

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