Calculate the predetermined overhead rates

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Question - At the beginning of the year, Grey Corporation estimated the following:

 

Assembly Department

Packaging Department

Overhead

$840,000

$210,000

Direct labor hours

80,000 hrs.

4,000 hrs.

Machine hours

20,000 hrs.

12,000 hrs.

Grey uses departmental overhead rates. In the assembly department, overhead is applied on the basis of direct labor hours. In the packaging department, overhead is applied on the basis of machine hours. Actual data for the month of April are as follows:

 

Assembly Department

Packaging Department

Overhead

$42,759

$20,400

Direct labor hours

4,000 hrs.

300 hrs.

Machine hours

1,000 hrs.

1,200 hrs.

Required -

A. Calculate the predetermined overhead rates for the assembly and packaging departments.

B. Calculate the overhead applied to production in each department for the month of April.

C. Calculate how much each department's overhead is overapplied/underapplied.

Reference no: EM132733454

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