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    Wosepka Welding Company

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    Wosepka Welding Company applies factory overhead at a rate of $8.50 per direct-labor hour. Selected data for 20X7 operations are (in thousands):

    Case 1 Case 2
    Direct-labor hours 30 36
    Direct-labor cost $220 $245
    Indirect-labor cost 32 40
    Sales commissions 20 15
    Depreciation, manufacturing equipment 22 32
    Direct-materials cost 230 250
    Factory fuel costs 35 47
    Depreciation, finished-goods warehouse 5 17
    Cost of goods sold 420 510
    All other factory costs 138 204

    Compute for both cases
    1. Factory overhead applied.
    2. Total factory overhead incurred.
    3. Amount of underapplied or overapplied factory overhead.

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    Solution Preview

    Underapplied and Overapplied Overhead
    Wosepka Welding Company applies factory overhead at a rate of $8.50 per direct-labor hour. Selected data for 20X7 operations are (in thousands):

    Case 1 Case 2
    Direct-labor hours 30 36
    Direct-labor cost $220 $245
    Indirect-labor ...

    Solution Summary

    This solution is comprised of a detailed explanation to compute for both cases 1. Factory overhead applied, 2. Total factory overhead incurred, and 3. Amount of underapplied or overapplied factory overhead.

    $2.19

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