Question
Landis Company uses a job order cost system in each of its two manufacturing departments. Manufacturing overhead is applied to jobs on the basis of
Landis Company uses a job order cost system in each of its two manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department A and machine hours in Department B. In establishing the predetermined overhead rates for 2017, the following estimates were made for the year:
DepartmentABManufacturing overhead$2,100,000$1,400,000Direct labor cost1,500,0001,200,000Direct labor hours100,000100,000Machine hours200,000400,000
During January, the job cost sheet showed the following costs and production data:
DepartmentABDirect materials used$195,000$128,000Direct labor cost100,000110,000Manufacturing overhead incurred130,000135,000Direct labor hours8,0008,400Machine hours16,00034,000
Compute the predetermined overhead rate for each department.(Round answers to 2 decimal places, e.g. 52.75.)
Department ADepartment BPredetermined overhead rate
%$
per machine hour
Compute the total manufacturing cost assigned to jobs in January in each department.
Department ADepartment BTotal manufacturing costs
$
Compute the balance in the Manufacturing Overhead account at the end of January and indicate whether overhead is over- or underapplied.
Balance
Underapplied
Overapplied
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