Baehr Company is a manufacturer with a fiscal year that runs from July 1 to June 30. The company uses a normal job-order cost accounting system for its production costs. It uses a predetermined overhead rate based on direct labour hours to apply overhead to individual jobs. It prepared three budgets of overhead costs for the 2012 fiscal year as follows:

Although the annual ideal capacity is 150,000 direct labour hours, company officials have determined that 120,000 direct labour hours are the normal capacity for the year.
The following information is for November 2012 when Jobs X-50 and X-51 were completed:
Inventories, November 1
Raw materials and supplies ......................................$ 10,500
Work in process (Job X-50) .......................................54,000
Finished goods .....................................................112,500
Purchases of raw materials and supplies
Raw materials .....................................................$135,000
Supplies ...............................................................15,000
Materials and supplies requisitioned for production
Job X-50 ............................................................$ 45,000
Job X-51 ...............................................................37,500
Job X-52 ...............................................................25,500
Supplies ................................................................12,000
........................................................................ $120,000
Factory direct labour hours (DLH)
Job X-50 ..........................................................3,500 DLH
Job X-51 ..........................................................3,000 DLH
Job X-52 ...........................................................2,000 DLH
Labour costs
Direct labour wages ................................................$ 51,000
Indirect labour wages (4,000 hours) ................................15,000
Supervisory salaries ...................................................6,000
...........................................................................$ 72,000
Building occupancy costs (heat, light, depreciation)
Factory facilities ......................................................$ 6,500
Sales offices .............................................................1,500
Administration offices .................................................1,000
.............................................................................$ 9,000
Factory equipment costs
Power .....................................................................$ 4,000
Repairs and maintenance................................................ 1,500
Depreciation ...............................................................1,500
Other ........................................................................1,000
.............................................................................$ 8,000
Instructions
(a) Calculate the predetermined rate to be used to apply overhead to individual jobs during the fiscal year.
(b) Prepare a schedule showing the costs assigned to each of Jobs X-50, X-51, and X-52.
(c) Calculate the cost of goods manufactured for November.
(d) Calculate the cost assigned to work in process on November 30.
(e) Determine whether overhead for November is under-applied or over-applied, and by what amount.

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Direct labour hours Variable overhead costs Fixed overhead costs Total overhead 100,000 $325,000 216,000 $41,000 20,000 390,000 216,000 140,000 $455,000 216,000 $671,000