Sanderson Company uses a predetermined overhead rate to apply overhead. Overhead 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 material in amount.
4. Compute the total cost of Job 689. If there are 50 units in Job 689, what is the unit cost?

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Department 1 Department 2 Direct labor hours 100,000 20,000 Machine hours 10,000 30,000 Direct labor cost $750,000 $160,000 Overhead cost $250,000 $162,000 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 32,000 Direct labor cost $748,000 $168,000 Overhead cost $247,500 $175,000 The accounting records of the company show the following data for Job 689: Department 1 Department 2 Direct labor hours 125 50 Machine hours 10. 205 Direct materials cost $1,580 $2,650 Direct labor cost $937 $400