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At the beginning of the year, M Company estimated the following: Assembly Department Testing Department Total Overhead $338,000 $630,000 $968,000 Direct labor hours 130,000 40,000

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At the beginning of the year, M Company estimated the following: Assembly Department Testing Department Total Overhead $338,000 $630,000 $968,000 Direct labor hours 130,000 40,000 170,000 Machine hours 45,000 120,000 165,000 Muses departmental overhead rates. In the assembly department, overhead is applied on the basis of direct labor hours. In the testing department, overhead is applied on the basis of machine hours. Actual data for the month of March are as follows: Assembly Department Testing Department Total Overhead $29,850 $58,000 $87,850 Direct labor hours 11,700 3,450 15,150 Machine hours 4.100 10,900 15,000 (1) Predetermined overhead rate equals the estimated overhead costs divided by the estimated activity level. Find the overhead rate for each department. (2) Multiply overhead rate in each department by the department's driver or activity. (3) Compare applied overhead to actual overhead costs incurred to determine under/over applied overhead. HTML Editor arch RT 40 0 # % 5 & 7 8 6 3 4. 9

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