Question

Problem 2-4A (Video) (Part Level Submission) 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, and machine hours in Department K. In establishing the predetermined overhead rates for 2020, the following estimates were made for the year. Departme Do Review - Manufacturing overhead Direct labor costs Direct labor hours Machine hours $1,170,000 $1,462,500 100,000 400.000 $1,625,000 $1,250,000 125.000 500,000 $720,000 $450,000 40,000 120.000 Review Results by Study During January, the job cost sheets showed the following costs and production data Department Direct materials used Direct labor costs Manufacturing overhead incurred Direct labor hours Machine hours $140,000 $120,000 399.000 8.000 14,000 $120,000 $110,000 $124,000 11,000 45,000 $78,000 $37,500 579,000 3,500 10,490 (a) Compute the predetermined overhead rate for each department (Round answers to decimal places 2000 2000 he w on Inc. All Rights Reserved. A n of Wis c 12.50 or 12.504.) Lice .

Answer 1

Department D Department E Department Predetermined Overhead rate = Manufacturing Overhead Cost Manufacturing Overhead Cost Direct labor Cost Direct labor Hours Manufacturing Overhead Cost Machine Hours 1170000 1462500 1625000 125000 720000 120000 14 15 13 6.00 80.00% of direct labor Cost Per Direct labor Hour Per Machine Hour 16 17