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 .
( b ) Compute the total manufacturing costs assigned to jobs in January in each department .
( c ) Compute the under- or over applied overhead for each department at January 31 .
E3-3
the ledger of American Company has the following work in process account .