WoodGrain Technology makes home office furniture from fi ne hardwoods. The company uses a joborder costing system and predetermined overhead rates to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Preparation Department is based on machine-hours, and the rate in the Fabrication Department is based on direct materials cost. At the beginning of the year, the company€™s management made the following estimates for the year:

Job 127 was started on April 1 and completed on May 12. The company€™s cost records show the following information concerning the job:

Required:
1. Compute the predetermined overhead rate used during the year in the Preparation Department. Compute the rate used in the Fabrication Department.
2. Compute the total overhead cost applied to Job 127.
3. What would be the total cost recorded for Job 127? If the job contained 25 units, what would be the unit product cost?
4. At the end of the year, the records of WoodGrain Technology revealed the following actual cost and operating data for all jobs worked on during the year:

What was the amount of underapplied or overapplied overhead in each department at the end of theyear?

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Department Preparation Fabrication Machine-hours 80,000 21,000 Direct labor-hours. Direct materials cost .. Direct labor cost 65,000 $190,000 $400,000 $280,000 $530,000 Manufacturing overhead cost$416,000 $720,000 35,000 Department Preparation Fabrication 350 80 $940 $710 70 130 $1,200 $980 Machine-hours Direct labor-hours Direct materials cost. Direct labor cost. .. Department Preparation Fabrication 73,000 30,000 Machine-hours 24,000 68,000 $165,000 $420,000 $390,000 740,000 or-hours Direct materials cost Manufacturing overhead cost