Problem 2: Overhead Application using a Predetermined Overhead Rate Tiana Shar, the controller for Bondi Furniture Company, is in the process of analysing the overhead costs for the month of November. She has gathered the following date for the month. Labour Job 77 Job 78 Job 79 3,500 3,000 2,000 Labour costs S 204, 000 15, 000 6, 000 Direct-labour wages Indirect-labour wages Supervisory salaries Material Inventory, November 1 Raw material and supplies Work in Finished goods S 10, 500 54, 000 112,500 process Cob Purchases of raw materials and supplies Raw material Supplies (indirect material S135,000 15,000 Direct material and supplies requisitioned for production: Job 77 Job 78 Job 79 S 45, 000 37, 500 25, 500 12, 000 S120, 000 Supplies (indirect material Total Other Building occu costs (heat, light, de ciation etc S 6,400 , 600 1,000 Factory facilities Administrative offices Total Production equipment costs: Power Repairs and maintenance Depreciation Other Total $ 4, 100 1, 500 1, 500 1,000 S 8, 100 The firm's job order costing system uses direct-labour-hours (measured at practical capacity) as the cost driver for overhead application. In December of the preceding year, Shar had prepared Problem solving assignment Page 2 of 10 the following budgeted for direct-labour and manufacturing overhead costs for the current year. The plant is theoretically capable of operating at 150, 000 direct-labour hours per year. However, Shar estimates that the practical capacity is 120,000 hours in a typical year Manufacturing overhead Variable S 325, 000 Fixed Direct-labour hours S 216, 000 216, 000 216,000 100, 000 120, 000 140,000 390, 000 455, 000 During November the following jobs were completed: Job 77 Job 78 Side chairs End tables Required: Assist Shar by making the following calculations 1. Calculate the predetermined overhead rate for the current year. 2. Calculate the total cost of job 77 3. Computer the amount of manufacturing overhead applied to job 79 during November. 4. What was the total amount of manufacturing overhead applied during November? 5. Compute the actual manufacturing overhead incurred during November 6. Calculate the overapplied or underappied for November