Beckner inc. is a job-order manufacturer. the company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. for the current year, estimated direct labor hours are 153,000 and estimated factory overhead is $1,208,700. the following information is for september. job x was completed during september, while job y was started but not finished. september 1, inventories: materials $ 26,000 work-in-process (all job x) 55,400 finished goods 107,600 materials purchases $ 177,000 direct materials requisitioned: job x $ 76,000 job y 70,000 direct labor hours: job x 9,000 job y 7,500 labor costs incurred: direct labor ($8.00 per hour) $ 132,000 indirect labor 56,000 factory supervisory salaries 13,100 rental costs: factory $ 11,300 administrative offices 5,200 total equipment depreciation costs: factory $ 12,400 administrative offices 4,800 indirect materials used $ 30,700 the underapplied or overapplied overhead for september is:

Under/over allocation= $6,850 overallocated

Explanation:

Giving the following information:

The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours are 153,000 and estimated factory overhead is $1,208,700.

The following information is for September:

Direct labor hours: Job X 9,000 Job Y 7,500

Labor costs incurred: Direct labor ($8.00 per hour) $ 132,000

Manufacturing overhead costs:

Indirect labor 56,000

Factory supervisory salaries 13,100

Rental costs:

Factory $ 11,300

Total equipment depreciation costs:

Factory $ 12,400

Indirect materials used $ 30,700

Total= 123,500

First, we need to determine the manufacturing overhead rate:

manufacturing overhead rate= total estimated manufacturing overhead/ total amount of allocation base

manufacturing overhead rate= 1208700/ 153000= $7.9 per direct labor hour

Allocated overhead= manufacturing overhead rate* actual allocation base= 7.9* 16500 hours= $130,350

Under/over allocation= real overhead - allocated overhead

Under/over allocation= 123500 - 130350= 6850 overallocated