Palace Lighting Fixtures Inc. uses a predetermined overhead rate to apply overhead. Over¬

head is applied on the basis of direct labor hours in Department 1 and on the basis of machine hours in Department 2. At the beginning of the year, the following estimates are provided:

Required:
1. Compute the predetermined overhead rate for each department.
2. Compute the applied overhead for all jobs during the year. What is the under- or over¬
applied overhead for each department? For the firm?
3. Prepare the journal entry that disposes of the overhead variance, assuming it is not ma¬
terial in amount.
4. Compute the total cost of Job 689. If there are fifty units in Job 689, what is the unit

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Department 1 Department 2 Direct labor hours 100,000 20,000 Machine hours 10,000 35,000 Direct labor cost $900,000 $190,000 Overhead cost $300,000 $196,000 Actual results reported for all jobs during the year are as follows: Department 1 Department 2 Direct labor hours 98,000 21,000 Machine hours 11,000 36,000 Direct labor cost $882,400 $168,000 Overhead cost $301,000 $200,600 The accounting records of the company show the following data for Job 689: