4-11 Accounting for Overhead The Lynn Company has made the following pre- dictions for 19-4: MACHINING ASSEMBLY Factory overhead $ 600,000 $ 800,000 Direct-labor cost 1,000,000 1,600,000 Direct-labor hours 100,000 200,000 Machine-hours 50,000 200,000 The company uses a predetermined overhead rate for applying overhead to production orders on a machine-hour basis in Machining and on a direct- labor-cost basis in Assembly. 1. Compute the predetermined overhead rate for each department. 2. During February the cost sheet for job #494 contained the following: ASSEMBLY MACHINING Direct materials requisitioned $ 5,000 $15,000 Direct-labor cost 10,000 12,000 Direct-labor hours 1,000 1,500 2,000 1,000 Machine-hours Compute the total overhead cost of job #494. 3. At the end of 19_4, the actual factory overhead costs were $680,000 in Machin- ing and $725,000 in Assembly. Compute the over- or underapplied overhead for each department, assuming that the machine-hours and direct-labor costs were precisely as predicted. 4. Repeat the computations in part (3), assuming that 55,000 actual machine- hours were incurred in Machining and actual direct-labor cost in Assembly was $1,800,000.