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 labour cost in Department D, direct labour hours in Department E, and machine hours in Department K. 

In establishing the predetermined overhead rates for 2022, the following estimates were made for the year.

Instructions 

a. Calculate the predetermined overhead rate for each department. 

b. Calculate the total manufacturing costs assigned to jobs in January in each department. 

c. Calculate the under- or over-applied overhead for each department at January 31.

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Department D E Manufacturing overhead $1,200,000 $1,500,000 Direct labour costs $1,500,000 $1,250,000 Direct labour hours 100,000 125,000 Machine hours 400,000 500,000 The following information pertains to January 2022 for each manufacturing department. Direct materials used Direct labour costs Manufacturing overhead incurred Direct labour hours Machine hours D $140,000 $120,000 $ 99,000 8,000 34,000 Department E $126,000 $110,000 $124,000 11,000 45,000 K $900,000 $450,000 40,000 120,000 K $78,000 $37,500 $79,000 3,500 10,400