E2-13
Tombert Decorating uses a job order cost system to collect the costs of its interior decorating business. Each client ' s consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year.
Estimated overhead $ 960,000 Actual overhead $ 982,800 Estimated decorator hours 40,000 Actual decorator hours 40,500
The company uses Operating Overhead in place of Manufacturing Overhead.
Instructions( a) Compute the predetermined overhead rate.( b) Prepare the entry to apply the overhead for the year.
( c) Determine whether the overhead was under- or over applied and by how much.
P2-4A
Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct lab(); cost in Department D, direct labor hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2017, the following estimates were made for the year.
During January, the job cost sheets showed the following costs and production data.
Instructions( a) Compute the predetermined overhead rate for each department.