Calculate the predetermined overhead rates

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Reference no: EM133153977

Question - At the beginning of the year, Potatoes Unlimited (PU) estimated the following:


Harvesting Department

Packaging Department

Total

Overhead

$310,000

$90,000

$400,000

Direct Labour Hours

77,500

10,000

87,500

Machine Hours

40,000

60,000

100,000

PU uses departmental overhead rates. In the Harvesting Department, overhead is applied on the basis of machine hours. In the Packaging Department, overhead is applied on the basis of direct labour hours. Actual data for the month of August are as follows.


Harvesting Department

Packaging Department

Total

Overhead

$26,500

$7,750

$34,250

Direct Labour Hours

6,500

840

7,340

Machine Hours

3,400

6,525

9,925

Required -

1. Calculate the predetermined overhead rates for the Harvesting and Packaging Departments.

2. Calculate the overhead applied to production in each department for August.

3. How much as each department's overhead been overapplied or underapplied?

Reference no: EM133153977

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