Question

Problem 15-4A (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 E, and machine hours in Department K. In establishing the predetermined overhead rates for 2017, the following estimates were made for the year. Department D E K Manufacturing overhead $854,000 $1,500,000 $1,020,000 Direct labor costs $1,220,000 $1,875,000 $675,000 Direct labor hours 150,000 125,000 60,000 Machine hours 600,000 750,000 120,000 During January, the job cost sheets showed the following costs and production data. Department D E K Direct materials used $210,000 $189,000 $117,000 Direct labor costs $180,000 $165,000 $56,250 Manufacturing overhead incurred $148,500 $186,000 $118,500 Direct labor hours 12,000 16,500 5,250 Machine hours 51,000 67,500 10,390 (a) Your answer is correct. Compute the predetermined overhead rate for each department. (Round answers to 2 decimal places, e.g. 10.25.) Overhead rate Department D % Department E $ per direct labor hour Department K $ per machine hour Click if you would like to Show Work for this question: Open Show Work Show Solution Show Answer Link to Text Attempts: 1 of 3 used (b) Your answer is incorrect. Try again. Compute the total manufacturing costs assigned to jobs in January in each department. (Round answers to 0 decimal places, e.g. 2,500.) Manufacturing Costs Department D $ Department E $ Department K $ Click if you would like to Show Work for this question: Open Show Work Show Solution Show Answer Link to Text Attempts: 3 of 3 used (c) Compute the under- or overapplied overhead for each department at January 31. (Round answers to 0 decimal places, e.g. 2,525.) Manufacturing Overhead Department D $ Department E $ Department K $

Answer 1

Answer

Answer 1

Predetermined overhead rate	Estimated OH Cost / Estimated Total units
Department D
Estimated OH cost	854000
Direct Labor costs	1220000
OH rate	70%
Department E
Estimated OH cost	1500000
Direct Labor hours	125000
OH rate	12.00	per direct labor hour
Department K
Estimated OH cost	1020000
Machine hours	120000
OH rate	8.5	per machine hour

Answer 2	Total manufacturing cost assigned
	Predetermined overhead rate	70%	12	8.5
	Direct labor cost	180000
	Direct labor hours		16500
	Machine hours			10390
	Total manufacturing cost assigned	126000	198000	88315
Answer 3	Manufacturing cost incurred	148000	186000	118500
		22000	12000	30185
		Underapplied	Overapplied	Underapplied
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