After Grow is a landscape company that operates in Southwestern Ontario. The company has two departments. The Landscape Design Department creates beautiful plans for backyard spaces, including gardens, decks, and swimming pools. The Lawn Maintenance Department provides grass cutting and garden care services. Because no two customers have the same needs, the company uses job order costing to determine how much to charge customers for services.

	Landscape Design	Lawn Maintenance
Design Hours	20,000	-
Direct labour hours	9,000	16,000
Materials and Supplies	18,000	5,000
Direct labour costs	430,000	800,000
Department overhead costs	700,000	320,000

The predetermined overhead rate in the Landscape Design Department is based on design hours, and in the Lawn Maintenance Department it is based on direct labour costs. Customers are charged for the direct materials and labour related to their specific jobs as well as some amount of applied overhead costs.

2. Determine the under or overapplied overhead for each department, assuming the following actual total cost and operating data for all work done.

	Landscape Design	Lawn Maintenance
Design Hours	23,000	-
Direct labour hours	8,000	15,000
Materials and Supplies	19,000	6,000
Direct labour costs	$400,000	$725,000
Department overhead costs	$770,000	$300,000