Compute departmental overhead rates based on machine

Reference no: EM13265230

Wall Nuts, Inc. produces paneling that requires two processes, A and B, to complete. Oak is the best-selling of all the many types of paneling produced. Information related to the 40,000 units of oak paneling produced annually is shown in the following table:

Direct materials	$380,000
Direct labor
Department A (6,000 DLH x $25 per DLH)	$150,000
Department B (35,125 DLH x $16 per DLH)	$562,000
Machine Hours
Department A	24,000 MH
Department B	32,000 MH

Wall Nuts' total expected overhead costs and related overhead data are shown below.

	Department A	Department B
Direct labor hours	67,000 DLH	170,000 DLH
Machine hours	100,000 MH	80,000 MH
Manufacturing overhead costs	$450,000	$600,000

1. Use the data for Wall Nuts, Inc. to compute departmental overhead rates based on machine hours in Department A and machine hours in Department B.

2. Use the data for Wall Nuts, Inc. to compute the dollar amount of overhead applied to each unit of oak paneling, assuming the company uses departmental overhead rates based on machine hours in Department A and machine hours in Department B.

3. Use the above data for Wall Nuts, Inc. to compute the total manufacturing cost per unit of oak paneling assuming the company uses departmental overhead rates based on machine hours in Department A and machine hours in Department B.

Reference no: EM13265230

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