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Net Play Company 720000

Price: $2.50


Net Play Company uses a job order cost system in each of its three manufacturing
departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in
Department A, direct labor hours in Department B, and machine hours in Department C.
In establishing the predetermined overhead rates for 2014, the following estimates
were made for the year.

   A   B   C 
Manufacturing overhead   720,000  640,000  900,000
Direct labor costs   600,000  100,000  600,000
Direct labor hours   50,000  40,000  40,000
Machine hours   100,000  120,000  150,000

During January, the job cost sheets showed the following costs and production data.
Department

   A   B   C 
Direct materials used   92,000  86,000  64,000
Direct labor costs   48,000  35,000  50,400
Manufacturing overhead incurred   60,000  60,000  72,100
Direct labor hours   4,000  3,500  4,200
Machine hours   8,000  10,500  12,600

Instructions
(a) Compute the predetermined overhead rate for each department.
(b) Compute the total manufacturing costs assigned to jobs in January in each department.
(c) Compute the under- or overapplied overhead for each department at January 31.

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