Determining overhead rates, using direct labor cost, direct labor hour, and machine hour LO_6,7 methods; determining job cost; computing underapplied and overapplied overhead Mickey Manufacturing Company is studying the results of applying factory overhead to production. The following data have been used: estimated factory overhead, $60,000; estimated materials costs, $50,000; estimated labor costs,

$60,000; estimated direct labor hours, 30,000; estimated machine hours, 20,000; work in process at the beginning of the month, none.

The actual factory overhead incurred for the month of November was

$75,000, and the production statistics on November 30 are as follows:

Required:
1.Compute the predetermined rate, based on the following:

a. Direct labor cost

b. Direct labor hours

c. Machine hours 2. Using each of the methods, compute the estimated total cost of each job at the end of the month.
3. Determine the under- or overapplied factory overhead, in total, at the end of the month under each of the methods.
4. Which method would you recommend? Why?

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Direct Direct Materials Labor Labor Machine Job Costs Costs Hours Hours Date Jobs Completed 101 $ 5,000 $ 7,200 5,000 3,000 Nov. 10 102... 7,000 10.000 6,000 3,200 Nov. 14 103. 8,000 11,000 6,500 4,000 Nov. 20 104. 9,000 9.000 5,600 3,400 In process 105...... 10,000 15,000 10,500 6,500 106...... 11,000 4.200 3,000 1,500 Nov. 26 In process Total..... $50,000 $56,400 36,600 21,600