Reference no: EM132974274

Job Order Costing and Factory Overhead Construction Department Finishing Department

Giles Products Ltd uses a job order costing system to control costs in its two production department. Factory overhead is applied on the basis of machine hours in the Construction Department and on the basis of direct labour cost in the Finishing Department.

The company prepared the following estimates for its production:

Machine hours 6,800 7,125

Direct labour costs 240,000 380,000

Direct labour hours 13,000 24,000

Factory overhead 408,000 570,000

The accounting records for Job 431 reveal the following:

                                Construction Department       Finishing Department

Machine hours                    40                                  50

Direct labour costs            1,640                            1,800

Direct labour hours          90                                  100

Factory overhead            1,300                             1,420

Question A. Calculate the predetermined overhead rate for each department

Question B. Calculate the total costs of Job 431

Question C. If the actual direct labour cost in the Finishing Department was $375,800 and the actual factory overhead was $560,000, was the overhead over-applied or under-applied?