Solution-Calculate the predetermined overhead rates

Calculate the predetermined overhead rates

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Question - At the beginning of the year, Grey Corporation estimated the following:

	Assembly Department	Packaging Department
Overhead	$840,000	$210,000
Direct labor hours	80,000 hrs.	4,000 hrs.
Machine hours	20,000 hrs.	12,000 hrs.

Grey uses departmental overhead rates. In the assembly department, overhead is applied on the basis of direct labor hours. In the packaging department, overhead is applied on the basis of machine hours. Actual data for the month of April are as follows:

	Assembly Department	Packaging Department
Overhead	$42,759	$20,400
Direct labor hours	4,000 hrs.	300 hrs.
Machine hours	1,000 hrs.	1,200 hrs.

Required -

A. Calculate the predetermined overhead rates for the assembly and packaging departments.

B. Calculate the overhead applied to production in each department for the month of April.

C. Calculate how much each department's overhead is overapplied/underapplied.

Reference no: EM132733454

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Calculate the predetermined overhead rates

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Reference no: EM132733454

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