Reference no: EM132986014
Perfect Image Ltd produces two types of computer printers, a laser model and an inkjet model, which pass L07 through two production departments, fabrication and assembly. The following data relate to the year just ended:
Fabrlcatlon Assembly
Budgeted overhead $270000 $135000
Expected aceivity(in direct labour hours) 22500 90000
Expected aceivity(in machine hours) 45000 12375
Actual overhend costs for the yenr were $450 000
Laser InkJet
Units produced 11250 112500
Prirne costs (material and labour) 90000 675000
Direct labour hours used:
Fabrication 1500 21000
Assembly 30000 72000
Machine hours used:
Fabrication 15000 30000
Assembly 1500 12000
Problem 1. Calculate the predeterm ined plantwide overhead rate based on direct labour hours.
Problem 2. Calculate the per unit cost of the laser and inkjet printers, based on a plantwide overhead rate assuming that direct labour hours is the cost driver.
Problem 3. Calculate predetermined departmental overhead rates, assuming that machine hours is the cost driver in fabrication ûnd direct labour hours is the cost driver in assembly.
Problem 4. Calculate the per unit cost of the laser and inkjet printers, based on the departmental overhead rates.
Problem 5. Estimate the amount of underapplied or overapplied overhead using: (a) a plantwide overhead rate (b) depa mental overhead rates.
Problem 6. Which approach is best for Perfect Image, a plantwide overhead rate or departmental overhead rates? Why?