Question

Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied
(a) Compute the predetermined overhead rate for each department. (Round answers to 2 decimal places, e.g. 12.50 or 12.50%.) O
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Answer #1

(a)

Department D

= Manufacturing overhead / Direct labor costs

= $959,000 / $1,370,000

= 70%

Department E

= Manufacturing overhead / Direct labor hours

= $1,500,000 /125,000

=$12

Department K

= Manufacturing overhead / Machine hours

= $720,000 /120,000

=$6

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