The following information pertains to Trenton Glass Works for the year just ended.
Budgeted direct-labor cost: 70,000 hours (practical capacity) at $16 per hour
Actual direct-labor cost: 80,000 hours at $17.50 per hour
Budgeted manufacturing overhead: $997,500
Actual selling and administrative expenses: 432,000
Actual manufacturing overhead:
Property taxes 23,000
Indirect labor 81,000
Supervisory salaries 201,000
Rental of space 301,000
Indirect material (see data below) 80,000
1. Compute the firm's predetermined overhead rate, which is based on direct-labor hours.
Predetermined overhead rate $ per hour
2. Calculate the overapplied or underapplied overhead for the year.
General Journal Debit Credit.
The solution discuses direct costs for Trenton Glass Works.