The Claremont Company forecasts its overhead rate for 20XX at $30.00 per hour. This rate was based on the assumption tha...

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The Claremont Company forecasts its overhead

April 14, 2018

The Claremont Company forecasts its overhead rate for 20XX at $30.00 per hour. This rate was based on the assumption that the fixed portion of indirect manufacturing costs would amount to $12,000,000, and that the variable indirect manufacturing expenses would amount to $6,000,000 or $10.00 per direct labor hour based on a projected labor base of 600,000 hours. Consider the effect of the following assumptions:

1. At the end of 20XX, actual company experience shows indirect manufacturing costs of $15,000,000 and actual direct labor hours of 600,000.

Was the overhead: Underabsorbed_________ Overabsorbed______________

Did this benefit: The Company __________ Its Customer ________________

How much? $_____________________

2. At the end of 20XX, actual overhead costs amounted to $21,500, 000 and the company expended 700,000 direct labor hours.
Was the overhead: Underabsorbed ___________ Overabsorbed _____________

Did this benefit: The Company ___________ Its Customer ___________________

How much? $______________________

3. At the end of 20XX, actual overhead costs amounted to $17,000,000 and the company expended 450,000 direct labor hours.

Was the overhead: Underabsorbed _____________ Overabsorbed ___________
Did this benefit: The Company _______________ Its Customer _______________

How much? $______________________










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