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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


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.


Solution Summary

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