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White Company has two departments: cutting and finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The
White Company has two departments: cutting and finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The cutting department bases its rate on machine hours, and the finishing department bases its rate on direct labour cost. At the beginning of the year, the company made the following estimates Direct labour-hours Machine-hours Manufacturing overhead cost Direct labour cost Department Cutting Finishing 5, Bee 21,000 45,000 $352,5ee $498,000 $ 75,000 $323,400 Required: 1. Compute the predetermined overhead rate to be used in each department (Round "Cutting Department answer to 2 decimal places and "Finishing Department" answer to nearest whole percent.) Department Cutting Finishing per MH % of DLC Predetermined overhead rate 2. Assume that the overhead rates that you computed in Requirement (1) are in effect. The job cost sheet for job 203, which was started and completed during the year, showed the following Department Cutting Finishing Direct labour-hours Machine-hours Materials requisitioned 5 Direct labour cost 5 320 5 80 $ 500 5 20 4 30 Compute the total overhead cost applied to job 203. Do not found intermediate calculations and round your answers places) cima Total overhead cost applied
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