Question 1

Deuter Ace Corp has two production departments assembly and finishing, and two service departments sourcing (purchasing and handling of raw materials and human resources) and operations (work scheduling, supervision and inspection). The amount of labour hours provided by each of the service departments to the other departments is shown below:

Total labour hours used by departments
	Operations	Sourcing	Assembly	Finishing
Sourcing	20,000	-	40,000	60,000
Operations	-	-	60,000	50,000

The estimated overhead costs for each of the departments and the cost drivers for the two production departments are as follows:

	Operations	Sourcing	Assembly	Finishing
Estimated overhead costs	$205,000	$165,000	$410,000	$255,000
Cost drivers			25,000 machine hours	33,000 direct labour hours

Required: (a) Calculate the total overhead costs for the Assembly and Finishing departments after the re-apportionment of the costs from the service departments. (Round your solutions to the nearest dollar.) (b) Calculate the department overhead rates for the Assembly and Finishing departments using the appropriate bases. (Round your solutions to the nearest cent.)

Question 2

Daxter Auto Company uses a job-order costing system with a plantwide overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:

Machine hours required to support estimated production	100,000
Fixed manufacturing overhead cost	$650,000
Variable manufacturing overhead cost per machine hour	$3.00

During the year, Job 2214 was started and completed. The following information was available for this job:

Direct materials requisitioned	$680
Direct labour	21 hours at $10 per hour
Machine hour used	40

During the year, the company worked a total of 126,000 machine-hours on all jobs and incurred actual manufacturing overhead costs of $1,350,000.

Required: (a) Determine the accumulated manufacturing costs assigned to Job 2214. (b) Determine the underapplied or overapplied overhead. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.