Fairfield company applies manufacturing overhead to products at a predetermined rate of $50 per direct labor hour. Its manufacturing costs for the most recent period are summarized here:
| Item |
Description |
|
|
Total Cost |
| Direct materials |
Used on Jobs 101 and 102 |
|
|
$ |
60,000 |
| Indirect materials |
Used on multiple jobs |
|
|
|
30,000 |
| Hourly labor wages |
750 hours @ $30 per hour |
|
|
|
|
|
200 hours for Job 101 = |
$ |
6,000 |
|
|
|
300 hours for Job 102 = |
|
9,000 |
|
|
|
250 hours for Job 103 = |
|
7,500 |
|
22,500 |
|
|
|
|
|
|
| Factory supervision |
|
4,000 |
| Production engineer |
|
8,000 |
| Factory janitorial work |
|
2,500 |
| Selling, general, and administrative salaries |
|
9,000 |
| Other manufacturing overhead costs (factory rent, insurance, depreciation, etc.) |
|
7,500 |
| Other selling, general, and administrative costs (office rent, insurance, depreciation, etc.) |
|
6,000 |
|
| 1. |
Post the preceding information to Fairfield Company's Manufacturing Overhead T-account. |
2. Compute over- or underapplied manufacturing overhead.