Carlson Graphics has two departments which prepare design media to the printing industry. The design department allocates overhead costs using direct labor hours. The graphics department allocates overhead costs using machine hours.
Design Graphics
Budgeted Overhead $750,000 $660,000
Budgeted DLH 25,000 55,000
Budgeted Machine Hrs 15,000 30,000
Actual DLH (year) 20,000 50,000
Actual Machine Hrs (year) 8,000 35,000
Actual DLH (job 1050) 2,000 3,000
Actual Machine Hrs (job 1050) 18,000 5,000
Actual Overhead (year) $800,000 $500,000
Actual Overhead (Job #1050) $40,000 $50,000
1. Calculate the overhead rate for the design department.
2. Calculate the overhead rate for the graphics department.
3. How much overhead was applied to job 1050 during the year?
4. Determine the amount of over / under applied overhead for the year.
