Sino-woodworks Ethiopia Ltd makes office furniture from fine hardwoods. The companyuses a job-order costing system and predetermined overhead rates to apply manufacturingoverhead cost to jobs. The predetermined overhead rate in the Preparation Department isbased on machine-hours, and the rate in the Fabrication Department is based on directmaterials cost. At the beginning of the year, the company's management made the followingestimates for the year:Job-C was started on April 1 and completed on May 12. The company's cost records showthe following information concerning the job:
Required:
a) Compute the predetermined overhead rate used during the year in the Preparation andFabrication Departments.
b) Compute the total overhead cost applied to Job-C.
c) What would be the total cost recorded for Job-C? If the job contained 25 units, whatwould be the unit product cost?
d) At the end of the year, the records of the company revealed the following actual cost andoperating data for all jobs worked on during the year:What was the amount of under-applied or over-applied overhead in each department atthe end of the year?