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Refer to the information above. Jarjar 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 Sewing Total
Department Department
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.
2. Calculate the overhead applied to production in each department for the month of June.
3. By how much has each departments overhead been overapplied? Underapplied?
II. Now assume that Jarjar has decided to use a plantwide overhead rate based on
direct labor hours.
Required:
1. Calculate the predetermined plantwide overhead rate. (Note: Round to the nearest cent.)
2. Calculate the overhead applied to production for the month of June.
3. Calculate the overhead variance for the month of June.
III. At the beginning of the year, Darth Vader estimated the following:
Overhead $621,600 Direct labor hours 84,000
Darth Vader uses normal costing and applies overhead on the basis of direct labor hours.
For the month of March, direct labor hours were 7,400.
Required:
1. Calculate the predetermined overhead rate for Darth.
2. Calculate the overhead applied to production in March.
Yoda uses normal costing and applies overhead on the basis of direct labor hours. For the
month of January, direct labor hours were 7,650. By the end of the year, Yoda showed the
following actual amounts:
Overhead$436,000 Direct labor hours 89,600
Assume that unadjusted Cost of Goods Sold for Gaudi was $707,000.
Required:
1. Calculate the predetermined overhead rate for Yoda.
2. Calculate the overhead applied to production in January.
3. Calculate the total applied overhead for the year. Wwas overhead over- or underapplied?
By how much?
4. Calculate adjusted Cost of Goods Sold after adjusting for the overhead variance.