Predetermined Overhead Rates, Overhead Variances, Unit Costs

Primera Company produces two products and uses a predetermined overhead rate to apply overhead. Primera currently applies overhead using a plantwide rate based on direct labor hours. Consideration is being given to the use of departmental overhead rates where overhead would be applied on the basis of direct labor hours in Department $1$ and on the basis of machine hours in Department $2.$ At the beginning of the year, the following estimates are provided:

Department $1$ Department $2$

Direct labor hours $640,000128,000$

Machine hours $16,000192,000$

Overhead cost $$384,000$ $$1,152,000$

Actual results reported by department and product during the year are as follows:

Department $1$ Department $2$

Direct labor hours $627,200134,400$

Machine hours $17,600204,800$

Overhead cost $$400,000$ $$1,232,000$

Product $1$ Product $2$

Direct labor hours

Department $1480,000147,200$

Department $296,00038,400$

Machine hours

Department $18,0009,600$

Department $224,800180,000$

Required:

Question Content Area

$1.$ Compute the plantwide predetermined overhead rate.

$fill in the blank $218$a$8$a$073$fccf$98\_1$

$2$

per direct labor hour

Calculate the overhead assigned to each product.

Product $1$ $fill in the blank $218$a$8$a$073$fccf$98\_2$

$1,152,000$

Product $2$ $fill in the blank $218$a$8$a$073$fccf$98\_3$

$371,200$

$2.$ Calculate the predetermined departmental overhead rates. If required, round your answers to the nearest cent.

Department $1$ $fill in the blank $218$a$8$a$073$fccf$98\_4$

$0\mathrm{.}6$

per direct labor hour

Department $2$ $fill in the blank $218$a$8$a$073$fccf$98\_5$

$6$

per machine hour

Calculate the overhead assigned to each product.

Product $1$ $fill in the blank $218$a$8$a$073$fccf$98\_6$

Product $2$ $fill in the blank $218$a$8$a$073$fccf$98\_7$

$3.$ Using departmental rates, compute the applied overhead for the year.

$fill in the blank $218$a$8$a$073$fccf$98\_8$

What is the under$-$ or overapplied overhead for the firm?

$fill in the blank $218$a$8$a$073$fccf$98\_9$