Agassi 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 labor 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. D $1,200,000 $1,500,000 Manufacturing overhead Direct labor costs Direct labor hours Machine hours During January, the job cost sheets showed the following costs and production data. Department E $126,000 $110,000 $124,000 Direct materials used Direct labor costs Manufacturing overhead incurred Direct labor hours Machine hours Department E $1,500,000 $1,250,000 100,000 400,000 D $140,000 $120,000 $ 99,000 8,000 34,000 125,000 500,000 11,000 45,000 $900,000 $450,000 40,000 120,000 K $78,000 $37,500 $79,000 3,500 10,400 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 overapplied overhead for each department at January 31.

Agassi 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 labor 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. D $1,200,000 $1,500,000 Manufacturing overhead Direct labor costs Direct labor hours Machine hours During January, the job cost sheets showed the following costs and production data. Department E $126,000 $110,000 $124,000 Direct materials used Direct labor costs Manufacturing overhead incurred Direct labor hours Machine hours Department E $1,500,000 $1,250,000 100,000 400,000 D $140,000 $120,000 $ 99,000 8,000 34,000 125,000 500,000 11,000 45,000 $900,000 $450,000 40,000 120,000 K $78,000 $37,500 $79,000 3,500 10,400 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 overapplied overhead for each department at January 31.

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Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Agassi
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 labor 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.
D
$1,200,000
$1,500,000
Direct materials used
Direct labor costs
Manufacturing overhead
Direct labor costs
Direct labor hours
Machine hours
During January, the job cost sheets showed the following costs and production data.
Department
E
$126,000
$110,000
$124,000
Manufacturing overhead incurred
Direct labor hours
Machine hours
Department
E
$1,500,000
$1,250,000
100,000
400,000
D
$140,000
$120,000
$ 99,000
8,000
34,000
125,000
500,000
K
$900,000
$450,000
11,000
45,000
40,000
120,000
K
$78,000
$37,500
$79,000
3,500
10,400
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 overapplied overhead for each department at January 31.

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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 labor 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. Dept D E K Manufacturing overhead $780,000 $640,000 $750,000 Direct labor costs $600,000 $100,000 $600,000 Direct labor hours 50,000 40,000 40,000 Machine hours 100,000 120,000 150,000 During January, the job cost sheets showed the following costs and production data. Dept D E K…
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