WoodGrain Technology makes home 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 labor-hours. At the beginning of the year, the companys management made the following estimates for the year:

	Department
	Preparation				Fabrication
Machine-hours		85,000				34,000
Direct labor-hours		34,500				54,900
Direct materials cost	$	187,000			$	197,000
Direct labor cost	$	275,000			$	522,000
Fixed manufacturing overhead cost	$	212,500			$	505,080
Variable manufacturing overhead per machine-hour	$	3.00				-
Variable manufacturing overhead per direct labor-hour		-			$	5.00

Job 127 was started on April 1 and completed on May 12. The company's cost records show the following information concerning the job:

	Department
	Preparation					Fabrication
Machine-hours		300				67
Direct labor-hours		80				128
Direct materials cost	$	946			$	1,200
Direct labor cost	$	710			$	970

Requred:

1. Compute the predetermined overhead rate used during the year in the Preparation Department. Compute the rate used in the Fabrication Department. (Round predetermined overhead rate to 2 decimal places.)

	Predetermined Overhead Rate
Preparation department	$	per MH
Fabrication department	$	per DLH

2. Compute the total overhead cost applied to Job 127. (Round predetermined overhead rate to 2 decimal places and round your final answer to nearest whole dollar.)

Total overhead cost

3-a. What would be the total cost recorded for Job 127? (Round your predetermined overhead rate and intermediate calculations to 2 decimal places and round your final answer to nearest whole dollar.)

	Department
	Preparation	Fabrication	Total
Direct materials
Direct labor
Manufacturing overhead
Total cost	$	$	$

3-b. If the job contained 40 units, what would be the unit product cost? (Round predetermined overhead rate and final answer to 2 decimal places.)

Unit product cost

per unit

4. At the end of the year, the records of WoodGrain Technology revealed the following actual cost and operating data for all jobs worked on during the year: (Round predetermined overhead rate to 2 decimal places.)

	Department
	Preparation				Fabrication
Machine-hours		84,700				24,500
Direct labor-hours		28,000				52,000
Direct materials cost	$	162,800			$	427,000
Manufacturing overhead cost	$	475,850			$	702,600

What was the amount of underapplied or overapplied overhead in each department at the end of the year?

Preparation Department	Underapplied overhead
Fabrication Department	Overapplied overhead