(Departmental rates) Elegant Style Tile Corporation has two departments, Mixing and Drying. All jobs go through each department, and the company uses a job order costing system. Overhead is applied to jobs based on labor hours in Mixing and on machine hours in Drying. In December 2005, corpo¬ rate management estimated the following production data for 2006 in setting its predetermined overhead rates:

Two jobs completed during 2006 were #2296 and #2297. The job oidei cost sheets showed the following information about these jobs:

Direct labor workers are paid $8 per hour in the Mixing Department and $20 per hour in Drying.

a. Compute the predetermined overhead rates used in Mixing and Drying for 2006.

b. Compute the direct labor cost associated with each job for both departments.
C. Compute the amount of overhead assigned to each job in each department.

d. Determine the total cost of Jobs #2296 and #2297.

e. Actual data for 2006 for each department follow.

What is the amount of underapplied or overapplied overhead for each de¬ partment for the year ended December 31, 2006.'LO1.

Transcribed Image Text:

Mixing Drying Machine hours 14,400 208,000 Direct labor hours 176,000 24,800 Departmental overhead $748,000 $988,000