Question 2 15 marks

At the beginning of the year Grey Corporation estimated the following:

Assembly Department Packaging Department

Overhead R840,000 R210,000

Direct Labor Hours 80,000 hrs. 4,000hrs

Machine hours 20,000 hrs. 12,000 hrs.

Grey uses department overhead rates. in the assembly department, overhead is applied to direct labor hours. In the packaging department, overhead is applied to the basis of machine-hours. Actual data for the month of April are as follows:

Assembly Department Packing Department

Overhead R42,759 R20,400

Direct labor hours 4,000 hrs. 300 hrs.

Machine hours 1,000 hrs. 11,200 hrs.

Required:

1) Calculate the predetermined overheads rate for the assembly and packaging departments

2) Calculate the overhead applied to production in each department for the month of April.

3) Calculate how much each department's overhead is overapplied/underapplied.