Problem 2A-4A Waterway Company uses a job order cost system in each of its three manufacturing departments....

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Accounting

Problem 2A-4A

Waterway Company uses a job order cost system in each of its threemanufacturing departments. Manufacturing overhead is applied tojobs on the basis of direct labor cost in Department D, directlabor hours in Department E, and machine hours in DepartmentK.

In establishing the predetermined overhead rates for 2020, thefollowing estimates were made for the year.

Department

D

E

K

Manufacturing overhead$ 1,197,000$ 1,500,000$ 720,000
Direct labor costs$ 1,496,250$ 1,250,000$ 450,000
Direct labor hours100,000125,00040,000
Machine hours400,000500,000120,000

During January, the job cost sheets showed the following costs andproduction data.

Department

D

E

K

Direct materials used$ 140,000$ 126,000$ 78,000
Direct labor costs$ 120,000$ 110,000$ 37,500
Manufacturing overhead incurred$ 99,000$ 124,000$ 79,000
Direct labor hours8,00011,0003,500
Machine hours34,00045,00010,450
Compute the predetermined overhead rate for each department.(Round answers to 2 decimal places, e.g.12.50.)
Overhead rate
Department D%
Department E$per direct labor hour
Department K$per machine hour

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Compute the total manufacturing costs assigned to jobs inJanuary in each department.

Manufacturing Costs

Department D$
Department E$
Department K$

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LINK TO TEXT

Compute the under- or overapplied overhead for each departmentat January 31.

Manufacturing Overhead

Department D$

              Underapplied                          Overapplied            

Department E$

              Overapplied                          Underapplied           

Department K$

              Overapplied                          Underapplied           

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Answer & Explanation Solved by verified expert
4.4 Ratings (847 Votes)
1 Overhead rate Predetermined overhead rate Department D Manufacturing overhead Direct labor costs 1197000 1496250 80 Predetermined overhead rate Department E Manufacturing    See Answer
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