Reference no: EM131563733

Question -

Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labour cost in Department D, direct labour hours in Department E, and machine hours in Department K.

In establishing the predetermined overhead rates for 2016, the following estimates were made for the year.

	Department
	D	E	K
Manufacturing overhead	$1,240,000	$1,500,000	$720,000
Direct labour costs	$1,550,000	$1,250,000	$450,000
Direct labour hours	100,000	125,000	40,000
Machine hours	400,000	500,000	120,000

During January, the job cost sheets showed the following  costs and production data.

	Department
	D	E	K
Direct materials used	$140,000	$126,000	$78,000
Direct labour costs	$120,000	$110,000	$37,500
Manufacturing overhead incurred	$99,000	$124,000	$79,000
Direct labour hours	8,000	11,000	3,500
Machine hours	34,000	45,000	10,390

1. Calculate the predetermined overhead rate for each department.

2. Calculate the total manufacturing costs assigned to jobs in January in each department.

3. Calculate the under- or over-applied overhead for each department at January 31.