Question

Problem 15-4A (Part Level Submission) Agass 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 o, direct labor hours in Department and machine hours in Department In establishing the predetermined overhead rates for 2017, the following estimates were made for the year. Department 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 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 $99,000 $126,000 $110,000 $124,000 11,000 45,000 $70,000 $37,500 $79,000 3,500 10,430 8.000 34,000 Compute the predetermined overhead rate for each department (Round answers to 2 decimal places, ... 10.25.) Overhead rate Department D Department Es per direct labor hour Departments per machine hour Click if you would like to show Work for this question: Doen Show. Work

Answer 1

Calculation of predetermine overhead rate

Department D = 1170000/1462500 = 80%

Department E = 1625000/125000 =   13 Per direct labor hour

Department K = 720000/120000 = 6 per machine hour

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