Reference no: EM133034882

Problem - 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 2020, the following estimates were made for the year.

	Department
	A	B	C
Manufacturing Overhead	$725,000	$625,000	$920,000
Direct labour Cost	$580,000	$120,000	$625,000
Direct labour Hours	46,500	41,800	41,000
Machine Hours	91,500	108,000	127,500

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

	Department
	A	B	C
Direct Materials Used	$92,800	$82,500	$66,500
Direct Labour Cost	$54,400	$33,500	$48,000
Manufacturing Overhead Incurred	$63,300	$69,000	$72,800
Direct Labour Hours	3,400	4,200	4,300
Machine Hours	7,350	10,650	14,700

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 31^st.