Calculating Departmental Overhead Rates and Applying Overhead to Production At the beginning of the year, Glaser Company estimated the following: Assembly Department Testing Department Total Overhead $467,000 $415,630 $882,630 Direct labor hours 140,000 138,600 278,600 Machine hours 109,250 81,938 191,188 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: Assembly Department Testing Department Total Overhead $46,700 $41,563 $88,263 Direct labor hours 14,000 13,860 27,860 Machine hours 10,925 8,194 19,119 Required: 1. Calculate the predetermined overhead rates for the assembly and testing departments. Round your answers to the nearest cent. Assembly department overhead rate $ per direct labor hour Testing department overhead rate $ per machine hour 2. Calculate the overhead applied to production in each department for the month of March. If required, round your answers to nearest whole value. Assembly department $ Testing department $ 3. By how much has each department's overhead been overapplied? Underapplied? Assembly department $ Testing department

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Calculating Departmental Overhead Rates and Applying Overhead to Production

At the beginning of the year, Glaser Company estimated the following:

	Assembly Department	Testing Department	Total
Overhead	$467,000			$415,630	$882,630
Direct labor hours	140,000			138,600	278,600
Machine hours	109,250			81,938	191,188

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:

	Assembly Department	Testing Department	Total
Overhead	$46,700			$41,563	$88,263
Direct labor hours	14,000			13,860	27,860
Machine hours	10,925			8,194	19,119

Required:

1. Calculate the predetermined overhead rates for the assembly and testing departments. Round your answers to the nearest cent.

Assembly department overhead rate	$ per direct labor hour
Testing department overhead rate	$ per machine hour

2. Calculate the overhead applied to production in each department for the month of March. If required, round your answers to nearest whole value.

Assembly department	$
Testing department	$

3. By how much has each department's overhead been overapplied? Underapplied?

Assembly department		$
Testing department		$

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