Dotsero Technology,Inc Job 243 Entered into Production on April 1 and Was

Essay

Dotsero Technology,Inc.,has a job-order costing system.The company uses predetermined overhead rates in applying manufacturing overhead cost to individual jobs.The predetermined overhead rate in Department A is based on machine hours,and the rate in Department B is based on direct materials cost.At the beginning of the most recent year,the company's management made the following estimates for the year:
$\begin{array}{|l|r|r|}\hline &{\text { Department }} \\\hline & \mathbf{A} & \mathbf{B} \\\hline \text { Machine-hours } & 70,000 & 19,000 \\\hline \text { Direct labour-hours } & 30,000 & 60,000 \\\hline \text { Direct materials cost } & \$ 195,000 & \$ 282,000 \\\hline \text { Direct labour cost } & \$ 260,000 & \$ 520,000 \\\hline \begin{array}{l}\text { Manufacturing overhead } \\\text { cost }\end{array} & \$ 420,000 & \$ 705,000 \\\hline\end{array}$
Job 243 entered into production on April 1 and was completed on May 12.The company's cost records show the following information about the job:
$\begin{array}{|l|r|r|}\hline & {\text { Department }} \\\hline & \mathbf{A} & \mathbf{B} \\\hline \text { Machine-hours } & 250 & 60 \\\hline \text { Direct labour-hours } & 70 & 120 \\\hline \text { Direct materials cost } & \$ 840 & \$ 1,100 \\\hline \text { Direct labour cost } & \$ 610 & \$ 880 \\\hline\end{array}$
At the end of the year,the records of Dotsero showed the following actual cost and operating data for all jobs worked on during the year:
$\begin{array}{|l|r|r|}\hline &{\text { Department }} \\\hline & \text { A } & \text { B } \\\hline \text { Machine-hours } & 61,000 & 20,000 \\\hline \text { Direct labour-hours } & 28,000 & 66,000 \\\hline \text { Direct materials cost } & \$ 156,000 & \$ 284,000 \\\hline \begin{array}{l}\text { Manufacturing overhead } \\\text { cost }\end{array} & \$ 385,000 & \$ 705,000 \\\hline\end{array}$
Required:
a.)Compute the predetermined overhead rates for Department A and Department B.
b.)Compute the total overhead cost applied to Job 243.
c.)Compute the amount of underapplied or overapplied overhead in each department at the end of the current year.