Calculating Departmental Overhead Rates and Applying Overhead to Production

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

Assembly

DepartmentTesting

Department

Total

Overhead$736,000$640,320$1,376,320

Direct labor hours82,00095,940177,940

Machine hours64,00045,440109,440

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

DepartmentTesting

Department

Total

Overhead$66,240$57,629$123,869

Direct labor hours7,3808,63516,015

Machine hours5,7604,0909,850

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 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$

Testing department$