Calculating Departmental Overhead Rates and Applying Overhead to Production

At the beginning of the year, Videosym Company estimated the following:

	Assembly Department		Testing Department		Total
Overhead	$620,000		$180,000		$800,000
Direct labour hours	155,000		20,000		175,000
Machine hours	80,000		120,000		200,000

Videosym uses departmental overhead rates. In the assembly department, overhead is applied on the basis of direct labour 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	$53,000		$15,500		$68,500
Direct labour hours	13,000		1,680		14,680
Machine hours	6,800		13,050		19,850

Required:

1. Calculate the predetermined overhead rates for the assembly and testing departments. Round your answers to the nearest cent.

Assembly department overhead rate	$ per direct labour hour
Testing department overhead rate	$ per machine hour

2. Calculate the overhead applied to production in each department for the month of March.

Assembly department	$
Testing department	$

3. By how much has each department's overhead been overapplied? Underapplied?

Assembly department		$
Testing department		$