Question

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 Manufacturing overhead Direct labor costs Direct labor hours Machine hours 51,800,000 1,500,000 840,000 $2,250,000 1,500,000 540,000 48,000 120,000 120,000 480,000 125,000 600,000 During January, the job cost sheets showed the following costs and production data. Department Direct materials used Direct labor costs $168,000 $151,200 $93,600 144,000 $132,000 $45,000 Manufacturing overhead incurred $118,800 $148,800 94,800 4,200 54,000 10,420 Direct labor hours 9,600 40,800 13,200 Machine hours Your answer is correct. Compute the predetermined overhead rate for each department. (Round answers to 2 decimal places, e.g. 10.25.) Overhead rate t D Department E 12per direct labor hour Department K per machine hour

Answer 1

a) Compute the predetermined overhead rate for each department. (Round answers to 2 decimal places, e.g. 10.25.)
	Overhead rate
Department D	80%
Department E	$             12.00	per direct labor hour
Department K	$               7.00	per machine hour
b)Compute the total manufacturing costs assigned to jobs in January in each department. (Round answers to 0 decimal places, e.g. 2,500.)
	D	E	K
Direct materials used	$   1,68,000.00	$   1,51,200.00	$    93,600.00
Direct labor costs	$   1,44,000.00	$   1,32,000.00	$    45,000.00
Manufacturing overhead applied	$   1,15,200.00	$   1,58,400.00	$    72,940.00
Total manufacturing Cost	$   4,27,200.00	$   4,41,600.00	$ 2,11,540.00
	Manufacturing Costs
Department D	$   4,27,200.00
Department E	$   4,41,600.00
Department K	$   2,11,540.00
c)
3.Compute the under- or over-applied overhead for each department at January 31
	D	E	K
Actual	$   1,18,800.00	$   1,48,800.00	$    94,800.00
Applied	$   1,15,200.00	$   1,58,400.00	$    72,940.00
under applied/(overapplied)	$        3,600.00	$      -9,600.00	$    21,860.00