Question 4 Job Costing (20 Marks) Collaroy Products Ltd uses a job order costing system to control costs in its two production departments. Factory overhead is applied on the basis of machine hours to the Preparation Department and on the basis of direct labour cost in the Finishing Department. The company budgeted the following for last year: Preparation Finishing Manufacturing overhead Machine hours Direct labour hours Direct labour cost $285,600 6,800 13,000 $240,000 $ 684,000 9,000 24,000 $380,000 The accounting records for Job 842 reveal the following: Preparation Finishing Direct materials requisitioned Direct labour cost Direct labour hours Machine hours Required $1,300 $ 1,640 90 40 $1,420 $1,800 100 50 1. Calculate the predetermined overhead rate for each department 2. Calculate the total cost of Job 842 3. If the actual direct labour cost in the Finishing Department was $375,800 and the actual factory overhead was $682,500 was the overhead over-applied or under- applied