Delton electronics produces electronic component for the local market. The company uses a job - order costing system in which a predetermined overhead rates are used to apply manufacturing overhead cost to jobs. All cost related to a particular job are recorded in a job cost sheet. The finished products goes through two processes machining and assembly. The predetermined overhead in the assembly department is based on labour hours and machining department based on machine hours. The following estimates were made at the beginning of the year: A special order of 1000 components was received from a company in a neighbouring country and was accepted and completed during the year. The company's cost record shows the following information concerning the job: Required: i. Explain the purpose of a job cost sheet in a job order costing system. (4 marks) ii. Compute the predetermined overhead rate used during the year in the Machining and Assembly department. (5 marks) iii. Compute the total overhead cost applied to the special order. iv. Compute the total production cost charged for the special order and the cost per component. (6 marks) ACC280 (F) / Page 8 of 8 v. At the end of the year the actual cost and operating data for all jobs done during the year: Denartment Compute the amount of overapplied or underapplied in each department and in total. (7 marks) vi. Explain any TWO (2) reason why overhead might be underapplied in a given year. Delton electronics produces electronic component for the local market. The company uses a job - order costing system in which a predetermined overhead rates are used to apply manufacturing overhead cost to jobs. All cost related to a particular job are recorded in a job cost sheet. The finished products goes through two processes machining and assembly. The predetermined overhead in the assembly department is based on labour hours and machining department based on machine hours. The following estimates were made at the beginning of the year: A special order of 1000 components was received from a company in a neighbouring country and was accepted and completed during the year. The company's cost record shows the following information concerning the job: Required: i. Explain the purpose of a job cost sheet in a job order costing system. (4 marks) ii. Compute the predetermined overhead rate used during the year in the Machining and Assembly department. (5 marks) iii. Compute the total overhead cost applied to the special order. iv. Compute the total production cost charged for the special order and the cost per component. (6 marks) ACC280 (F) / Page 8 of 8 v. At the end of the year the actual cost and operating data for all jobs done during the year: Denartment Compute the amount of overapplied or underapplied in each department and in total. (7 marks) vi. Explain any TWO (2) reason why overhead might be underapplied in a given year