Metal Fabricating has two departments that all goods pass through: machining and assembly. Estimated data on each department for 2020 were as follows:

	Machining	Assembly
Budgeted Overhead	$1,200,000	$580,000
Budgeted Direct Labour Hours	30,000	20,000
Budgeted Machine Hours	80,000	20,000
Actual Overhead	$1,210,000	$600,000
Actual Direct Labour hours	28,000	25,000
Actual Machine hours	85,000	18,000

1). Compute the departmental overhead rates.

2) Using departmental rates compute the amount of over-applied or under-applied manufacturing overhead for each department for 2020.

Metal Fabricating manufactured 20 shelving units for a local auto repair shop. The cost sheetcontained the following information:

		Machining	Assembly
	Direct materials	40000	45000
	Direct labour	16000	$8000
	Machine hours	600	900
	Direct labour hours	240	700

3)Compute the selling price for the auto repair shop if the markup is 40% (5 marks)

4) Why would a company use departmental rates.