Calculating Departmental Overhead Rates and Applying Overhead to Production

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

Assembly DepartmentTesting Department

TotalOverhead $439,000 $373,150 $812,150

Direct labor hours 56,000 46,480 102,480

Machine hours 51,500 33,990 85,490

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 Testing Total

Department Department

Overhead $65,850 $55,973 $121,823

Direct labor hours 8,400 6,972 15,372

Machine hours 7,725 5,099 12,824

Required:

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

1. Assembly department overhead rate per direct labor hour
2. 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.

1. Assembly department
2. Testing department

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

Assembly department

Testing department