The entire problem omyedugenynymain.un quick access place your bookmarks here on

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The entire problem omyedugenynymain.un quick access place your bookmarks here on the bookmarks bar. Import bookmarks now.. Weygandt, Accounting Principles, 12e T RESOURCES Problem 20-4A Agassi Company uses a job order cost system in each of its three manufacturing departments.Manufacturing o In establishing the predetermined overhead rates for 2017, the following estimates were made for the year. 20-14 ore Manufacturing overhead Direct labor costs Direct labor hours Machine hours 931,000 $1,625,000 $1,020,000 1,330,000 $1,875,000 $675,000 60,000 750,000 120,000 150,000 600,000 125,000 During January, the job cost sheets showed the following costs and production data. Department Direct materials used Direct labor costs Manufacturing overhead incurred Direct labor hours Machine hours 210,000 $189,000 $117,000 $180,000 $165,000 $56,25o $118,500 12,000 16,500 5,250 51,000 67,500 10,340 $148,500 $186,000 Compute the predetermined overhead rate for each department. (Round answers to 2 decimal places e.g. 10.25 Overhead rate per direct labor hour per machine hour Compute the total manufacturing costs assigned to jobs in January in each department. (hund answers to O decima Manulacturing Costs Department D Departmment E

Explanation / Answer

a) Calculate overhead rate :

Department D = 931000*100/1330000 = 70% of direct labour cost

Department E = 1625000/125000 = 13 per labour hour

Department K = 1020000/120000 = 8.5 per machine hour

b) Calculate overhead applied

Department D = 180000*70% = 126000

Department E = 16500*13 = 214500

Department K = 10340*8.5 = 87890

c) Calculate overhead under or over applied :

Department D = 126000-148500 = 22500 Under applied

Department E = 214500-186000 = 28500 Over applied

Department K = 87890-118500 = 30610 Under applied

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