Quick Tour Print Search Annotations Accessibility Bookmark eTextbook: Principles of Cost Accounting | P4-14. Determining Overhead Rates, Using Direct Labor Cost, Direct Labor Hour, and Machine Hour Methods; Determining Job Cost; Computing Underapplied and Overapplied Overhead LO6 LOT Abbey Products Company is studying the results of applying factory overhead to production. The following data have been used estimated factory overhead, 560,000; estimated materials costs, 850,000; estimated direct labor costs, 560,000; estimated direct labor hours, 10,000; estimated machine hours, 20,000; work in process at the beginning of the month, none, The actual factory overhead incurred for November was $80,000, and the production statistics on November 30 are as follows: Materials Costs $5,000 Job 101 102 103 7.000 Direct Labor Costs $ 6,000 12.000 13,500 15,800 29.000 2400 $78.500 Machine Hours 3,000 3.200 4,000 3.400 Direct Labor Hours 1.000 2,000 2,500 2,600 4.500 400 13,000 Date Jobs Completed Nov. 10 Nov. 14 Nov. 20 In process Nov. 26 In process 8,000 9,000 10,000 11000 $50,000 104 106.. 6.500 106. 1,500 21 600 Total REQUIRED Critical Thinking Problem NE Mir Case NOV. 20 105... Total .. 400 11,000 $50,000 2.400 $78,500 In process 1,500 21,600 13,000 EQUIRED: Critical Thinking Problem 1. Compute the predetermined rate, based on the following: a Direct labor cost b. Direct labor hours c. Machine hours 2. Using each of the methods, compute the estimated total cost of each job at the end of the month. 3. Determine the under-or overapplied factory overhead, in total, at the end of the month under each of the methods. 4. Which method would you recommend? Why