Solution-Calculate predetermined overhead rate for each

Calculate predetermined overhead rate for each department

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Reference no: EM132488634

Question - Far Play 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 A, direct labour hours in Department B, and machine hours in Department C.

In establishing the predetermined overhead rates for 2019, the following estimates were made for the year.

	Department
	A	B	C
Manufacturing Overhead	$720,000	$620,000	$910,000
Direct labour Cost	$590,000	$125,000	$620,000
Direct labour Hours	47,500	41,500	40,000
Machine Hours	91,000	107,000	128,500

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

	Department
	A	B	C
Direct Materials Used	$92,500	$82,000	$66,000
Direct Labour Cost	$54,500	$33,000	$48,500
Manufacturing Overhead Incurred	$63,500	$69,500	$72,500
Direct Labour Hours	3,500	4,400	4,400
Machine Hours	7,250	10,750	14,500

Required -

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 31st.

Reference no: EM132488634

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Calculate predetermined overhead rate for each department

Reference no: EM132488634

Reference no: EM132488634

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