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Acquatic 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.

In establishing the predetermined overhead rates for 2005 the following estimates were made for the year.
Instructions:
(a) Compute the predetermined overhead rate for each department.

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

(c) Compute the under- or overapplied overhead for each department at January 31.

Manufacturing overhead (A) 92000 (B)86000 (C)64000
Direct labor cost (A) 48000, (B) 35000 ,(C) 50400
Manufacturing Overhead Incurred (A)76000,(B)74000,(C)61500
Direct Labor Hours, (A)4000,(B)3500,(C)4200
Machine Hours (A)8000,(B)10500,(C)12600

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The solution explains how to calculate predetermined overhead rate for each department, the total manufacturing costs assigned to jobs in each department and the under- or overapplied overhead

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Acquatic 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.

In establishing the predetermined overhead rates for 2005 the following estimates were made for the year.

Department
A B C
Manufacturing overhead $930,000 $800,000 $750,000
Direct labor cost $600,000 $100,000 $600,000
Direct labor hours 50,000 ...

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