The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year the company expects fixed overhead costs to be $600,000 and variable costs to be $800,000. The expected machine hours are 6,000 and the expected direct labor hours are 80,000. The actual fixed overhead costs are $700,000 and the actual variable overhead costs are $750,000. The actual machine hours during the year are 5,500 and the actual direct labor hours are 90,000.

a. How much overhead is allocated?

b. What is the over/under absorbed overhead?

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Originally Posted by sandle

The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year the company expects fixed overhead costs to be $600,000 and variable costs to be $800,000. The expected machine hours are 6,000 and the expected direct labor hours are 80,000. The actual fixed overhead costs are $700,000 and the actual variable overhead costs are $750,000. The actual machine hours during the year are 5,500 and the actual direct labor hours are 90,000.

a. How much overhead is allocated?

b. What is the over/under absorbed overhead?

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Do they allow accounting students to apply without basic mathematical and reading skills?

Do the math, read the text, it will quickly become obvious. There are a number of variances which can be calculated here, but you are asked two simple questions

I already did this and simple want to verify if I was wrong or rite. I will really appreciate if I can get simple answer instead of long comments.

Thanks.

I don't do sample answers but if you post your work I'll take a look at it