Question
At the beginning of the year, Hallett Company estimated the following: Cutting Department Sewing Department Total Overhead (OH) $240,000 $350,000 $590,000 Direct labor (DL) hours
At the beginning of the year, Hallett Company estimated the following: Cutting Department Sewing Department Total Overhead (OH) $240,000 $350,000 $590,000 Direct labor (DL) hours 31,200 100,000 131,200 Machine hours 150,000 150,000 Refer to the information for Hallett Company above. Hallett uses departmental overhead rates. In the cutting department, overhead is applied on the basis of machine hours. In the sewing department, overhead is applied on the basis of direct labor hours. Actual data for the month of June are as follows: Cutting Department Sewing Department Total Overhead $20,610 $35,750 $56,360 Direct labor hours 2,800 8,600 11,400 Machine hours 13,640 13,640
Required: 1. Calculate the predetermined overhead rates for the cutting and sewing departments. 2. Calculate the overhead applied to production in each department for the month of June. 3. By how much has each department's overhead been overapplied? Underapplied?
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