Far Play Company uses a job order cost system in each of its three manufacturing...
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Accounting
Far Play 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 labour cost in Department A, direct labour hours in Department B, and machine hours in Department C.
In establishing the predetermined overhead rates for 2017, the following estimates were made for the year.
Department
A
B
C
Manufacturing Overhead
$720,000
$620,000
$910,000
Direct labour Cost
$590,000
$125,000
$620,000
Direct labour Hours
47,500
41,500
40,000
Machine Hours
91,000
107,000
128,500
During January, the job cost sheets showed the following costs and production data.
Department
A
B
C
Direct Materials Used
$92,500
$82,000
$66,000
Direct Labour Cost
$54,500
$33,000
$48,500
Manufacturing Overhead Incurred
$63,500
$69,500
$72,500
Direct Labour Hours
3,500
4,400
4,400
Machine Hours
7,250
10,750
14,500
Required:
Calculate the predetermined overhead rate for each department
Calculate the total manufacturing costs assigned to jobs in January in each department.
Calculate the under-or over-applied overhead for each department at January 31st.
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