Problem 3 A fraser company has a job-order costing system. The company uses predetermined overhead rates in applying manufacturing overhead cost to individual jobs.

At the beginning of the most recent year, the company's management made the following estimates for the year:

Department A

Department B

Machine-hours

70,000

19,000

Direct labor-hours

30,000

60,000

Direct materials

$195,000

$282,000

Direct labor

$260,000

$520,000

Manufacturing overhead

$420,000

$705,000

a.The predetermined overhead rate in Department A is based on machine-hours. Compute the predetermined overhead rates for Department A

b.The predetermined overhead rate in Department B is based on direct labor hours. Compute the predetermined overhead rate for Department B

Job 1 was completed. The company's cost records show the following information for Job 1.

Department A

Department B

Machine-hours

250

60

Direct labor-hours

70

120

Direct materials

$840

$1,100

Direct labor

$610

$880

c.Compute the total applied manufacturing overhead costs for Job 1.