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15-4A (Part Level Submission) Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs

15-4A (Part Level Submission)

Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K.

In establishing the predetermined overhead rates for 2017, the following estimates were made for the year.

Department

D

E

K

Manufacturing overhead$931,000$1,625,000$1,020,000Direct labor costs$1,330,000$1,875,000$675,000Direct labor hours150,000125,00060,000Machine hours600,000750,000120,000

During January, the job cost sheets showed the following costs and production data.

Department

D

E

K

Direct materials used$210,000$189,000$117,000Direct labor costs$180,000$165,000$56,250Manufacturing overhead incurred$148,500$186,000$118,500Direct labor hours12,00016,5005,250Machine hours51,00067,50010,340

(a)

Compute the predetermined overhead rate for each department.

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