Precision instruments uses job order costing and apples manufacuring overhead to individual jobs by using predetermined overhead rates. In dept A, overhead is applied on the basis of machine hours and Dept B on thebasis of direct labor hous. At the beginning of the yea, managementmade th efollowing budget estimats as a step toward determining the overhead application rates.
|Dept A||Dept B|
|Direct labor hours||28000||25000|
Production of 4000 tachometers (job 399) was started in the middle of January and completed 2 weeks later. Thecost records for this job show the following information
|Dept A||Dept B|
|Job 399 4000 units of product|
|Cost of materials||$6800||$4500|
|Direct labor costs||8100||7200|
|Direct labor hours||540||600|
a. determine the overhead rate that should be used for each department in applying overhead costs to job 399
b. What is the total cost of job 399 and what is the unit cost of the product manufacuted on this production order
c. Prepare the journal entries required to record the sale (on account) of 1000 of the tachometers to SkiCraft Boats. The total sales price was $19,500
d. Assume the actual overhead cosest fo rthe year were $517,000 in dept A and $424,400 in dept B. Actual machine hours in Dept A were 17,000 and actual direct labor hours in Dept B were 26,000 during the year. On the basis of this information, determine the over or underapplied overhead in each department
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