Innovative Technologies Ltd uses a job order costing system to control costs in its two production departments. Factory overhead is applied on the basis of machine hours in the Construction Department and on the basis of direct labour cost in the Finishing Department. The company prepared the following estimates for its production.

Required

(a) Calculate the predetermined overhead rate for each department.

(b) Calculate the total cost of Job 431.

(c) If the actual direct labour cost in the Finishing Department was $751 600 and the actual factory overhead was $1 120 000, was the overhead overapplied or underapplied?

Transcribed Image Text:

Construction Department Finishing Department Machine hours Direct labour cost Direct labour hours Factory overhead 13600 $480,000 26000 $816000 The accounting records for Job 431 reveal the following. Machine hours Direct labour cost Direct labour hours Raw materials 14250 $ 760000 48 000 $1140000 Construction Department Finishing Department 80 $3280 180 $2600 100 $3600 200 $2 840