Example 1: Computing Job Costs - Departmental Basis Mixed Drink Limited has three departments - Glass, Water and Flavour. The company uses a job-order costing system. The Glass Department bases overhead on glass machine hours, the Water Department bases overhead rate on direct liquid machine-hours, and the Flavour Department bases its rate on direct-labour hours. At the beginning of the year, the company made the following estimates: Glass Department Water 1,500 Flavour 420.000 3.800 294,000 200 $3.550.000 Direct labour-hours Direct Glass Machine-hours Direct Liquid Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per glass machine-hour Variable manufacturing overhead per water machine-hour Variable manufacturing overhead per direct labour-hour 520,000 S2.205,000 $4.25 100 $3.330,000 $4.25 $4.25 S7.75 $7.75 $7.75 $1.50 $1.50 $1.50 Following is the job cost sheet for Job 888, which was started and completed during the year: Department Water Flavour Glass 22.125 Direct glass machine-hours Direct liquid machine-hours Direct labour hours Materials requisitioned Direct labour costs 59 $121.002 S62.650 32. 0109 SS 44.100 96,445 $95.000 $84,874 SI.597.900 5 Required: 1) Compute the predetermined overhead rate based on a department overhead rate. (Hint: Ensure work out overhead rate for both departments). [3 Marks] 2) Compute the total manufacturing cost assigned to Job 888 based on department overhead rate calculated in Requirement 1. [2 marks]