Sino-woodworks Ethiopia Ltd makes office furniture from fine hardwoods. The company uses a job-order costing system and predetermined overhead rates to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Preparation Department is based on machine-hours, and the rate in the Fabrication Department is based on direct materials cost. At the beginning of the year, the companys management made the following estimates for the year:

preperation fabrication

Machine hours 80,000 21000

direct labour-hours 35,000 65,000

direct material cost $190,000 $ 400,000

direct labour cost $280,000 $ 530,000

manufacturing over head cost $416,000 $ 720,000

Job-C was started on April 1 and completed on May 12. The companys cost records show the following information concerning the job:

preperation fabrication

Machine hours 350 70

Direct labour hours 80 130

Direct material cost $ 940 $1200

Direct labor cost $710 $ 980

Required: a) Compute the predetermined overhead rate used during the year in the Preparation and

Fabrication Departments.

b) Compute the total overhead cost applied to Job-C.

c) What would be the total cost recorded for Job-C? If the job contained 25 units, what

would be the unit product cost?

d) At the end of the year, the records of the company revealed the following actual cost and

operating data for all jobs worked on during the year:

preperation fabrication

Machine hours 73,000 24,000

Direct labor cost 30,000 68,000

Direct manufacturing cost $ 165,000 $ 420,000

Manufacturing overhead cost $390,000 $ 740,000

What was the amount of under-applied or over-applied overhead in each department at the end of the year?