Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 28

Assume the following for Round Top, Inc., for 2010. Round Top applies overhead on the basis of units produced.

Budgeted overhead	$350,000
Actual overhead	$360,000
Actual labor-hours	22,000
Actual number of units sold	650,000
Overapplied overhead	$ 30,000
Budgeted production (units)	700,000

Required How many units were produced in 2010?

Step 1 of 2

Overapplied overhead is the case when the applied factory overhead cost is greater than the actual factory overhead cost. Underapplied overhead is the case when the applied factory overhead cost is lesser than the actual factory overhead cost.