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Overhead computations

Attached is a problem I need help with.

Dotsero Technology, Inc., has a job-order costing system. The company uses predetermined overhead rates in applying manufacturing overhead cost to individual jobs. The predetermined overhead rate in Department A is based on machine-hours, and the rate in Department B is based on direct materials cost. At the beginning of the most recent year, the company's management made the following estimates for the year:

Department A Department B
Machine-hours 70,000 19,000
Direct labor-hours 30,000 60,000
Direct materials cost $195,000 $282,000
Direct labor cost $260,000 $520,000
Manufacturing overhead cost $420,000 $705,000

Job 243 entered into production an April 1 and was completed on May 12. The company's cost records show the following information about the job:

Department A Department B
Machine-hours 250 60
Direct labor-hours 70 120
Direct materials cost $840 $1,100
Direct labor cost $610 $880

At the end of the year, the records of Dotsero showed the following actual cost and operating data for all jobs worked on during the year:

Department A Department B
Machine-hours 61,000 20,000
Direct labor-hours 28,000 66,000
Direct materials cost $156,000 $284,000
Manufacturing overhead cost $385,000 $705,000

Required:

Part A: Compute the predetermined overhead rates for Department A and Department.

Part B: Compute the total overhead cost applied to Job 243.

Part C: Compute the amount of underapplied or overapplied overhead in each department at the end of the current year.

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Solution Summary

The solution explains how to calculate the predetermined overhead rate, overhead applied and under or over applied overhead

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