Ceskimen Clothing Company has two departments: cutting and sewing. The company uses job-order costing and computes a pre-determined overhead rate in each department. The cutting department uses direct labor hours as its base to calculate the rate and the sewing department uses machine hours. At the beginning of the year, the company made the following estimates:

	Department
	Cutting	Sewing
Machine Hours	10,000	4,000
Direct Labor Hours	20,000	1,000
Direct Labor Cost	$300,000	$20,000
Manufacturing Overhead Cost	$400,000	$100,000

Required: a) Compute the predetermined overhead rate for each department. b) The job cost sheet for Job #98, which was started and completed during the year, showed the following:

	Department
	Cutting	Sewing
Materials Requisitioned	$1,000	$100
Machine Hours	4	8
Direct Labor Hours	8	2
Direct Labor Cost	$120	$40

Calculate the amount of manufacturing overhead cost applied to Job #98.

c) At the end of the year, the records of the company showed the following actual cost and operating data for all jobs worked on during the year:

	Cutting Department	Sewing Department
Machine-hours	9,000	4,100
Direct labour-hours	18,000	1,200
Manufacturing overhead cost	$370,000	$98,000

Compute the amount of underapplied or overapplied overhead in each department at the end of the year.