Sorrento Products uses a job costing accounting system for its manufacturing costs. A predetermined overhead rate based on machine-hours is used to apply overhead to individual jobs. An estimate of overhead costs at different volumes was prepared for the current year as follows.

Machine-hours	180,000	200,000	240,000
Variable overhead costs	$ 684,000	$ 760,000	$ 912,000
Fixed overhead costs	1,440,000	1,440,000	1,440,000
Total overhead	$ 2,124,000	$ 2,200,000	$ 2,352,000

The expected volume is 200,000 machine-hours for the entire year. The following information is for March, when Jobs 302 and 304 were completed:

Inventories, March 1
Raw materials and supplies	$ 90,500
Work in process (Job 302)	197,300
Finished goods	497,800
Purchases of raw materials and supplies
Raw materials	$ 1,362,200
Supplies	174,800
Materials and supplies requisitioned for production
Job 302	$ 603,500
Job 304	508,300
Job 305	101,700
Supplies	33,600
	$ 1,247,100
Machine-hours (MH)
Job 302	6,700	MH
Job 304	6,600	MH
Job 305	4,000	MH
Direct labor-hours (DLH)
Job 302	9,200	DLH
Job 304	4,000	DLH
Job 305	2,400	DLH
Labor costs
Direct labor wages (all hours @ $32.00)	$ 499,200
Indirect labor wages (1,100 hours)	19,800
Supervisory salaries	28,200
Building occupancy costs (heat, light, depreciation, etc.)
Factory facilities	$ 28,500
Sales and administrative offices	30,700
Factory equipment costs
Power	$ 46,800
Repairs and maintenance	17,600
Other	22,200
	$ 86,600

Required:

Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year.

(Note: Regardless of your answer to requirement [a], assume that the predetermined overhead rate is $12 per machine-hour. Use this amount in answering requirements [b] through [f], as needed.)

Compute the total cost of Job 302 when it is finished.

How much of factory overhead cost was applied to Job 305 during March?

What total amount of overhead was applied to jobs during March?

Compute actual factory overhead incurred during March.

At the end of the year, Sorrento Products had the following account balances:

	Balance
Overapplied overhead	$ 1,680,000
Work-in-process inventory	2,640,000
Finished goods inventory	960,000
Cost of goods sold	20,400,000

Show the overapplied overhead effect on the account balances (final balances after allocation) in the following table.

A) Compute the predetermined overhead rate (combined fixed and variable) to be used to apply overhead to individual jobs during the year.

B) Compute the total cost of Job 302 when it is finished.

E) Compute actual factory overhead incurred during March.

F) Show the overapplied overhead effect on the account balances (final balances after allocation) in the following table.