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P4-14 Determining overhead rates, using direct labor cost, direct labor hour, and machine hour methods; determining job cost computing underapplied and overapplied overhead College Station Manufacturing Inc. is studying the results of applying factory overhead to production. The following data have been used: estimated factory overhead, $60,000; estimated materials costs, $50,000; estimated direct labor costs, $60,000; estimated direct labor hours, 10,000; estimated machine hours, 20,000; work in process at the beginning of the month, none. LO6 The actual factory overhead incurred for November was $80,000, and the production statistics on November 30 are as follows: Direct Labor Machine Date Jobs Direct Costs Labor Costs Hours S 6,000 12,000 13,500 15,600 29,000 Materials Hours Completed 3,000 3,200 4,000 3,400 6,500 1.500 In process Job 101. 102... $ 5,000 7,000 8,000 Nov, 10 Nov. 14 Nov. 20 In process Nov. 26 1,000 2,500 104 105. 10,00 4,500 Total.... $50,000 78,500 13,000 Required: 1. Compute the predetermined rate, based on the following 21,600 a. Direct labor cost b. Direct labor hours c. Machine hours 2. Using each of the methods, compute the estimated total 3. Determine the under- or overapplied factory overhead, in 4. Which method would you recommend? Why? cost of each job at the end of the month. total, at the end of the month under each of the methods

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