Al Rawahi Manufacturing 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 labour cost in Department E, direct labour hours in Department G, and machine hours in Department I.

In establishing the predetermined overhead rates for 2019, the following estimates were made for the year.

Department

X

Y

Z

Manufacturing overhead

$900,000

$1,800,000

$840,000

Direct labour costs

$1,500,000

$1,250,000

$450,000

Direct labour hours

100,000

125,000

40,000

Machine hours

400,000

500,000

110,000

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

Department

X

Y

Z

Direct materials used

$160,000

$126,000

$78;000

Direct labour costs

$120,000

$110,000

$37,500

Manufacturing overhead incurred

$89,000

$124,000

$74,000

Direct labour hours

8,000

12000

3,500

Machine hours

34,000

45,000

10,400

Instructions

(a). Compute the predetermined overhead rate for each department. (2 marks)

(b). Compute the total manufacturing costs assigned to jobs in January in each department. (2 marks)

(c). Compute the under-or over applied overhead for each department at January 31. (1 mark)