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3. Landis Company uses a job order cost system in each of its two manufacturing departments. Manufacturing overhead is applied to jobs on the basis
3. Landis Company uses a job order cost system in each of its two manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department A and machine hours in Department B. In establishing the predetermined overhead rates for 2017, the following estimates were made for the year. Department Manufacturing overhead Direct labor cost Direct labor hours Machine hours $2,100,000 1,500,000 100,000 200,000 $1,400,000 1.200,000 100,000 400,000 During March, the job cost sheet showed the following costs and production data Department Direct materials used Direct labor cost Manufacturing overhead incurred Direct labor hours Machine hours $165,000 105.000 130,000 8,000 16.000 $188.000 110.000 135,000 8.400 33.000 Instructions (a) Compute the predetermined overhead rate for each department. (b) Compute the total manufacturing cost assigned to jobs in March in each department (c) Compute the balance in the Manufacturing Overhead account at the end of March and indicate whether overhead is over or underapplied
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