Predetermined Departmental Overhead Rates, Applying Overhead to Production

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

	Cutting Department		Sewing Department		Total
Overhead	$240,000		$350,000		$590,000
Direct labor hours	31,200		100,200		131,400
Machine hours	150,000		—		150,000

Hallett uses departmental overhead rates. In the cutting department, overhead is applied on the basis of machine hours. In the sewing department, overhead is applied on the basis of direct labor hours. Actual data for the month of June are as follows:

	Cutting Department		Sewing Department		Total
Overhead	$20,610		$35,750		$56,360
Direct labor hours	2,800		8,600		11,400
Machine hours	13,640		—		13,640

Required:

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

Cutting department	$ per machine hour
Sewing department	$ per direct labor hour

2. Calculate the overhead applied to production in each department for the month of June. Use overhead application rates that are rounded to the nearest cent in your calculations, and round your final answers to the nearest dollar.

Cutting department	$
Sewing department	$

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

Cutting department	$
Sewing department    $

Answer rating: 100% (QA)

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