Question 6 options:

Entry Rules:

Round your answer totwo (2) decimal places.

Examples:

If your answer is $24,500.4718, enter 24500.47

If your answer is $24,500.4753, enter 24500.48

If your answer is $24,500.00, enter 24500.00

If your answer is $0.4718, enter 0.47

If your answer is ZERO, enter 0.00

Never enter $ or , when inputting numerical answers

QUESTION:

David manufactures snowboards for aspiring Olympic athletes and estimates the following:

	Designing Department	Drilling Department	Total
Overhead	$ 78,000	$ 72,000	$ 150,000
Direct labour hours	6,000	1,600	7,600
Machine hours	12,500	16,000	28,500

David uses departmental overhead rates for his business.

In the Designing Department, overhead is applied on the basis of direct labour hours.

In the Drilling Department, overhead is applied on the basis of machine hours.

Actual data for the month of June is as follows:

	Designing Department	Drilling Department	Total
Overhead	$ 48,700	$ 60,200	$ 108,900
Direct labour hours	3,600	2,200	5,800
Machine hours	10,200	14,000	24,200

Use the above information to answer the following questions.

What is the predetermined departmental overhead rate for the Designing Department?

HINT: remember to apply the rounding rules.

What is the predetermined departmental overhead rate for the Drilling Department?

HINT: remember to apply the rounding rules.

What is the overhead applied to production in the Designing Department for the month of June?

HINT: remember to apply the rounding rules.

What is the overhead applied to production in the Drilling Department for the month of June?

HINT: remember to apply the rounding rules.

Is overhead for the Designing Department under- or over-applied?

Enter either the word UNDER or OVER

Do not add additional spaces and be sure to spell the word you enter exactly as shown.

By how much?

HINT: be sure to use the entry rules!

Is overhead for the Drilling Department under- or over-applied?

Enter either the word UNDER or OVER

Do not add additional spaces and be sure to spell the word you enter exactly as shown.

By how much?

HINT: be sure to use the entry rules!