Calculating Departmental Overhead Rates and Applying Overhead to Production

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

	Assembly Department			Testing Department			Total
Overhead	$763,000			$740,110			$1,503,110
Direct labor hours	157,000			130,310			287,310
Machine hours	63,750			36,338			100,088

Glaser uses 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	$61,040			$59,209			$120,249
Direct labor hours	12,560			10,425			22,985
Machine hours	5,100			2,907			8,007

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 labor hour
Testing department overhead rate	$ per machine hour

2. Calculate the overhead applied to production in each department for the month of March. If required, round your answers to nearest whole value.

Assembly department	$
Testing department	$

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

Assembly department	Overapplied	$
Testing department	Overapplied	$