Determining over-under absorbed overhead


Q1) Alphonse Company assigns fixed overhead costs by machine hours and variable overhead costs by direct labor hours.  At the starting of year company expects fixed overhead costs to be= $600,000 and variable costs to be $800,000. Expected machine hours are 6,000 and expected direct labor hours are= 80,000. Actual fixed overhead costs are= $700,000 and actual variable overhead costs are $750,000. Actual machine hours during year are 5,500 and actual direct labor hours are 90,000.

a) How much overhead is assigned?

b) Determine the over/under absorbed overhead?

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Accounting Basics: Determining over-under absorbed overhead
Reference No:- TGS018949

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