Compute the predetermined overhead rate for each department

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Reference no: EM13498839

Agassi Company 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 D, direct labor hours in Department E, and machine hours in Department K.

In establishing the predetermined overhead rates for 2014, the following estimates were made for the year.



Department



D


E


K

Manufacturing overhead


$1,065,000


$1,525,000


$840,000

Direct labor costs


$1,500,000


$1,625,000


$585,000

Direct labor hours


130,000


125,000


52,000

Machine hours


520,000


650,000


120,000


During January, the job cost sheets showed the following costs and production data.



Department



D


E


K

Direct materials used


$182,000


$163,800


$101,400

Direct labor costs


$156,000


$143,000


$48,750

Manufacturing overhead incurred


$128,700


$161,200


$102,700

Direct labor hours


10,400


14,300


4,550

Machine hours


44,200


58,500


10,300


 

Compute the predetermined overhead rate for each department.

Reference no: EM13498839

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