Richey Company uses an actual cost accounting system that applies overhead on the basis of direct labor hours. At the beginning of the year, management estimated that during the year, the company would work 26,000 direct labor hours and budgeted $1,300,000 for MOH. The company actually worked 24,000 direct labor hours and incurred the following actual manufacturing costs: Direct materials used in production $1,240,000 Direct labor 1,800,000 Indirect labor 300,000 Indirect materials 220,000 Insurance 150,000 Utilities 190,000 Repairs and Maintenance 180,000 Depreciation 320,000 Determine the amount of underapplied or overapplied overhead for the year.

Richey Company uses an actual cost accounting system that applies overhead on the basis of direct labor hours. At the beginning of the year, management estimated that during the year, the company would work 26,000 direct labor hours and budgeted $1,300,000 for MOH. The company actually worked 24,000 direct labor hours and incurred the following actual manufacturing costs: Direct materials used in production $1,240,000 Direct labor 1,800,000 Indirect labor 300,000 Indirect materials 220,000 Insurance 150,000 Utilities 190,000 Repairs and Maintenance 180,000 Depreciation 320,000 Determine the amount of underapplied or overapplied overhead for the year.

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Description: Richey Company uses an actual cost accounting system that appliesoverhead on the basis of direct labor hours. At the beginning of the year,management estimated that during the year, the company would work26,000 direct labor hours and budgeted $1,300

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter16: Job Order Costing

Section: Chapter Questions

Problem 1CMA: Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A...

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