Media designs is a marketing firm that designs and prints customized marketing b
ID: 2435212 • Letter: M
Question
Media designs is a marketing firm that designs and prints customized marketing brochures. The design department designes the borchure and the printing department prints and binds it. Each department has seperate overhead rates. The following estimates for the two departments we made for the calendar year 2010.Design Printing
Overhead $800,000 $500,000
Direct Labor cost $3,250,000 $410,000
Direct Materials Cost $8,500 $250,000
Direct Labor hours 50,000 10,000
Media designs uses a budgeted overhead rate to apply overhead to jobs. Direct labor hours are used to allocate overhead in the design department, and direct materials cost is used to allocated overhead in the printing department.
a. What are the overhead rates for the design and printing departments?
b. A summary of the Matsui job follows:
Design Printing
Direct materials used $3,000 $12,000
Direct Labor cost $46,200 $28,500
Direct Labor hours 700 750
What are the overhead costs for the Matsui job?
c.Actual operating results for 2010 are
Design Printing
Overhead $802,000 $490,000
Direct Labor cost $3,193,000 $451,500
Direct Materials Cost $11,500 $230,000
Direct Labor hours 52,200 10,500
Calculate the over/underapplied overhead for each department.
Explanation / Answer
a. What are the overhead rates for the design and printing departments? Design Printing Overhead rate per hour $16 $50 b. A summary of the Matsui job follows: Design Printing Direct materials used $3,000 $12,000 Direct Labor cost $46,200 $28,500 Direct Labor hours 700 750 What are the overhead costs for the Matsui job? Over head cost $11,200 $37,500 c. Actual operating results for 2010 are Design Printing Overhead $802,000 $490,000 Direct Labor cost $3,193,000 $451,500 Direct Materials Cost $11,500 $230,000 Direct Labor hours 52,200 10,500 Calculate the over/underapplied overhead for each department. Overhead applied $835,200 $525,000 Actual Overhead $802,000 $490,000 Over applied $33,200 $35,000