Calculating Departmental Overhead Rates and Applying Overhead to Production At the beginning of the year, Glaser Company estimated the following: Overhead Direct labor hours Machine hours Overhead Direct labor hours Assembly Department $470,000 Machine hours 104,000 79,250 Testing Department Total Assembly Testing Department Department Total $56,400 12,480 9,510 Glaser uses departmental overhead rates. In the assembly department, overhead is applied on the basis of direct labor hours. In the testing department, overhead is applied on the basis of machine hours. Actual data for the month of March are as follows: $399,500 128,960 95,100 $ $ $47,940 15,475 $869,500 11,412 232,960 174,350 04,340 27,955 20,922 Required: 1. Calculate the predetermined overhead rates for the assembly and testing departments. Round your answers to the nearest cent. Assembly department overhead rate Testing department overhead rate 2. Calculate the overhead applied to production in each department for the month of March. If required, round your answers to nearest whole value. $ per direct labor hour $ per machine hour Assembly department Testing department 3. By how much has each department's overhead been overapplied? Underapplied? Assembly department $ Testing department $
Calculating Departmental Overhead Rates and Applying Overhead to Production At the beginning of the year, Glaser Company estimated the following: Overhead Direct labor hours Machine hours Overhead Direct labor hours Assembly Department $470,000 Machine hours 104,000 79,250 Testing Department Total Assembly Testing Department Department Total $56,400 12,480 9,510 Glaser uses departmental overhead rates. In the assembly department, overhead is applied on the basis of direct labor hours. In the testing department, overhead is applied on the basis of machine hours. Actual data for the month of March are as follows: $399,500 128,960 95,100 $ $ $47,940 15,475 $869,500 11,412 232,960 174,350 04,340 27,955 20,922 Required: 1. Calculate the predetermined overhead rates for the assembly and testing departments. Round your answers to the nearest cent. Assembly department overhead rate Testing department overhead rate 2. Calculate the overhead applied to production in each department for the month of March. If required, round your answers to nearest whole value. $ per direct labor hour $ per machine hour Assembly department Testing department 3. By how much has each department's overhead been overapplied? Underapplied? Assembly department $ Testing department $
Chapter1: Financial Statements And Business Decisions
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Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
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Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
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Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Calculating Departmental Overhead Rates and Applying Overhead to Production
At the beginning of the year, Glaser Company estimated the following:
Overhead
Direct labor
hours
Machine
hours
Overhead
Direct labor
hours
Assembly
Department
$470,000
Machine
hours
104,000
79,250
Testing
Department Total
Assembly
Testing
Department Department Total
$56,400
12,480
9,510
Glaser uses departmental overhead rates. In the assembly department, overhead is applied on the basis of direct labor
hours. In the testing department, overhead is applied on the basis of machine hours. Actual data for the month of March
are as follows:
$399,500
128,960
95,100
$
$
$47,940
15,475
$869,500
11,412
232,960
174,350
$104,340
27,955
20,922
Required:
1. Calculate the predetermined overhead rates for the assembly and testing departments. Round your answers to the
nearest cent.
Assembly department overhead rate
Testing department overhead rate
2. Calculate the overhead applied to production in each department for the month of March. If required, round your
answers to nearest whole value.
$ per direct labor hour
$ per machine hour
Assembly department
Testing department
3. By how much has each department's overhead been overapplied? Underapplied?
Assembly department
$
$
Testing department
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