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    Overhead calculations

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    Aquatic Manufacturing 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 A, direct labor hours in department B, and machine hours in Department C.

    Solve for (a), (b), & (c)

    Data and instructions attached.

    Aquatic Maufacturing
    Estimated Predetermined overhead rates
    Department
    A B C
    Manufacturing Overhead $930,000.00 $800,000.00 $750,000.00
    Direct labor cost $600,000.00 $100,000.00 $600,000.00
    Direct labor hours $50,000.00 $40,000.00 $40,000.00
    Machine hours $100,000.00 $120,000.00 $150,000.00

    January job cost sheets
    Department
    A B C
    Direct materials used $92,000.00 $86,000.00 $64,000.00
    Direct labor cost $48,000.00 $35,000.00 $50,400.00
    Manufacturing overhead incurrred $76,000.00 $74,000.00 $61,500.00
    Direct labor hours $4,000.00 $3,500.00 $4,200.00
    Machine hours $8,000.00 $10,500.00 $12,600.00

    (a) Compute the predetermined overhead rate for each department
    Department A overhead is applied on direct labor cost
    Department B overhead is applied on direct labor hours
    Department C overhead is applied on machine hours

    (b) Compute the total manufacturing cost assigned to jobs in January in each
    department.

    (c) Compute the under/over applied overhead for each department at January 31.

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    Problem Chapter 2 P2-4A
    Solve for (a), (b), & (c)
    Aquatic Manufacturing
    Estimated Predetermined overhead rates
    Department
    A B C
    Manufacturing Overhead $930,000.00 $800,000.00 $750,000.00
    Direct labor cost $600,000.00 $100,000.00 $600,000.00
    Direct labor hours $50,000.00 $40,000.00 $40,000.00
    Machine hours $100,000.00 $120,000.00 $150,000.00

    January job cost sheets
    Department
    A B C
    Direct materials used $92,000.00 $86,000.00 $64,000.00
    Direct labor cost $48,000.00 $35,000.00 $50,400.00
    Manufacturing overhead incurred $76,000.00 $74,000.00 $61,500.00
    Direct ...

    Solution Summary

    The solution explains how to calculate the predetermined overhead rate, total manufacturing cost and the amount of over or under applied overhead

    $2.19

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