Calculating Departmental Overhead Rates and Applying Overhead to Production At the beginning of the year, Glaser Company estimated the following: Overhead Direct labor hours Machine hours Assembly Department Testing Department Total $727,000 $857,860 $1,584,860 72,500 89,250 80,475 100,852 152,975 190,102 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 $87,240 $102,943 $190,183 Direct labor hours 8,700 9,657 18,357 Machine hours 10,710 12,102 22,812