Reference no: EM131922876

Problem - 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 labor cost in Department D, direct labor hours in Department E, and machine hours in Department K.

In establishing the predetermined overhead rates for 2014, the following estimates were made for the year.

Department D E K

Manufacturing overhead $1,065,000 $1,525,000 $840,000

Direct labor costs $1,500,000 $1,637,500 $589,500

Direct labor hours 131,000 125,000 52,400

Machine hours 524,000 655,000 120,000

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

Department D E K

Direct materials used $183,400 $165,060 $102,180

Direct labor costs $157,200 $144,100 $49,125

Manufacturing overhead incurred $129,690 $162,440 $103,490

Direct labor hours 10,480 14,410 4,585

Machine hours 44,540 58,950 10,300

(a) Compute the predetermined overhead rate for each department.