Exercise 5-33 Calculating Departmental Overhead Rates and Applying Overhead to Production

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

	Assembly Department	Testing Department	Total
Overhead	$338,000	$630,000	$968,000
Direct labor hours	130,000	40,000	170,000
Machine hours	45,000	120,000	165,000

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 Department	Testing Department	Total
Overhead	$29,850	$58,000	$87,850
Direct labor hours	11,700	3,450	15,150
Machine hours	4,100	10,900	15,000

Required:

1.Calculate the predetermined overhead rates for the assembly and testing departments.

2.Calculate the overhead applied to production in each department for the month of March.

3.By how much has each departments overhead been overapplied? Underapplied?