Donald Aeronautics Co. uses a budgeted overhead rate in applying overhead to individual job orders on a machine-hour basis for Department A and on a direct-labour-hour basis for Department B. At the beginning of 2011, the company’s management made the following budget predictions:

Cost records of recent months show the following accumulations for Job Order No. M89:

1. What is the budgeted overhead rate that should be applied in Department A? In Department B?

2. What is the total overhead cost of Job Order No. M89?

3. If Job Order No. M89 consists of 200 units of product, what is the unit cost of this job?

4. At the end of 2011, actual results for the year’s operations were as follows:

Find the under applied or over applied overhead for each department and for the factory as a whole.

Transcribed Image Text:

Dept. A Dept. B Direct labour cost 1,500,000 1,200,000 Factory overhead 2,170,000 1,000,000 Direct-labour-hours 90,000 125,000 Machine-hours 350,000 20,000