Dickson Company: An Example Using Multiple Predetermined Overhead Rates Step 1: Calculate the estimated total manufacturing overhead cost for each department. Milling Department Overhead Cost (Y): = $390,000 + ($2.00 per MH 60,000 MHS) Assembly Department Overhead Cost (Y): $500,000 + ($3.75 per DLH 80,000 DLHs) $500,000 + $300,000 $800,000 $390,000 + $ 1 20,000 $51 0,000 Step 2: Calculate the predetermined overhead rate in each department. Milling Department Overhead Rate = 60,000 machine-hours Assembly Department Overhead Rate $510,000 $800,000 direct labor-hours = $8.50 per machine-hour = $10.00 per direct labor-hour Step 3: Calculate the amount of overhead applied from both departments to Job 407 Milling Department: Overhead Applied to Job 407Assembly Department: Overhead Applied to Job 407 $10.00 per DLH 20 DLHs $200 = $8.50 per MH 90 MHS $765 Step 4: Calculate the total job cost for Job 407 Milling Assembly Total 350 965 $2,485 $ 70 $280 Total cost of Job 407 Step 5: Calculate the selling price for Job 407 Dickson Company: An Example Using Multiple Predetermined Overhead Rates Step 1: Calculate the estimated total manufacturing overhead cost for each department. Milling Department Overhead Cost (Y): = $390,000 + ($2.00 per MH 60,000 MHS) Assembly Department Overhead Cost (Y): $500,000 + ($3.75 per DLH 80,000 DLHs) $500,000 + $300,000 $800,000 $390,000 + $ 1 20,000 $51 0,000 Step 2: Calculate the predetermined overhead rate in each department. Milling Department Overhead Rate = 60,000 machine-hours Assembly Department Overhead Rate $510,000 $800,000 direct labor-hours = $8.50 per machine-hour = $10.00 per direct labor-hour Step 3: Calculate the amount of overhead applied from both departments to Job 407 Milling Department: Overhead Applied to Job 407Assembly Department: Overhead Applied to Job 407 $10.00 per DLH 20 DLHs $200 = $8.50 per MH 90 MHS $765 Step 4: Calculate the total job cost for Job 407 Milling Assembly Total 350 965 $2,485 $ 70 $280 Total cost of Job 407 Step 5: Calculate the selling price for Job 407