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Information: At the beginning of the year, Sorrel Company estimated the following: Machining Assembly Department Department Total Overhead $240,000 $360,000 $600,000 Direct labor hours 135,000
Information: At the beginning of the year, Sorrel Company estimated the following: Machining Assembly Department Department Total Overhead $240,000 $360,000 $600,000 Direct labor hours 135,000 240,000 375,000 Machine hours 200,000 200,000 Sorrel uses departmental overhead rates. In the machining department, overhead is applied on the basis of machine hours. In the assembly department, overhead is applied on the basis of direct labor hours. Actual data for the month of June are as follows: Machining Assembly Department Department Total Over head $22,500 $30,750 $53,250 Direct labor hours 11,000 20,000 31,000 Machine hours 17,000 17,000 Required: 1. Calculate the predetermined overhead rates for the machining and assembly departments. 2. Calculate the overhead applied to production in each department for the month of June. 3. By how much has each department's overhead been overapplied? Underapplied
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