Transcribed Image Text: 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

Transcribed Image Text: 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
E
D
K
Manufacturing overhead
Direct labor costs
Direct labor hours
$1,200,000
$1,500,000
$1,500,000
$1,250,000
125,000
500,000
$900,000
$450,000
40,000
120,000
100,000
Machine hours
400,000
During January, the job cost sheets showed the following costs and production data.
Department
D
E
K
Direct materials used
$140,000
$120,000
$ 99,000
8,000
34,000
$126,000
$110,000
$78,000
$37,500
$79,000
Direct labor costs
Manufacturing overhead incurred
Direct labor hours
$124,000
11,000
3,500
Machine hours
45,000
10,400
(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.

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