Quick Tour Print Search Annotations Accessibility eTextbook: Principles of Cost Accounting Q TT P4-15. Determining Overhead Rate, Using Direct Labor Cost, Direct Labor Hour, and Machine Hour Methods L06. LOT The following information, taken from the books of Herman Brothers Manufacturing represents the operations for January Materials used Direct labor cost Direct labor hours Machine hours Factory overhead Bronzing Casting Finishing $20,000 $10,000 $10,000 $ 8,000 $ 6,000 $ 9,000 1,000 500 1,620 4,000 5,000 2,025 $20,000 $10,000 $16,200 The job cost system is used, and the February cost sheet for Job M45 shows the following: Materials.... Direct labor.... Direct labor hours Machine hours Bronzing Casting Finishing $20.00 $40.00 $20.00 $64.00 $80.00 $54.00 8 6 6 2 3 1 The following actual information was accumulated during February Bronzing Casting Finishing 1,500 980 2,000 $35,000 $22.000 $32.500 Direct labor hours... Factory overhead... REQUIRED 1. Using the January data, ascertain the predetermined factory overhead rates to be used during February, based on the following: a Direct labor cost b. Direct labor hours c Machine hours 2 Prepare a schedule showing the total production cost of Job M45 under each method of applying factory overhead. 3. Prepare the entries to record the following for February operations: a. The liability for total factory overhead: > b Distribution of factory overhead to the departments. c. Application of factory overhead to the work in process in each department, using direct labor hours. (Use the predetermined rate calculated in Requirement 1.) d Closing of the applied factory overhead accounts. e Recording under and overapplied factory overhead and closing the actual factory overhead accounts. Mini-cas 421 PM Bu Gunn