Compute the predetermined overhead rate for each department

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Reference no: EM13590550

The Alaska plant produces two calculators and has two production departments: assembly and packaging. Information for the products is given below:

	Deluxe	Regular	Total
Units Produced	30,000	220,000
Prime Costs	180,000	1,620,000	1,800,000
Direct Labor Hours	15,000	175,000	190,000
Number of Setups	75	24	100
Machine Hours	18,000	82,000	100,000
Inspection Hours	4,000	24,000	28,000
Number of Moves	150	75	225

The following table presents activity information about the departments and products:

	Assembly	Packaging	Total
Direct Labor Hours:
Deluxe	12,000	3,000	15,000
Regular	138,000	37,000	175,000
Total	150,000	40,000	190,000
Machine Hours:
Deluxe	4,000	14,000	18,000
Regular	8,000	74,000	82,000
Total	12,000	88,000	100,000
Overhead Costs:
Setting Equipment	150,000	150,000	300,000
Moving Material	51,000	75,000	126,000
Machining	26,000	164,000	190,000
Inspection	13,000	73,000	86,000
Total	240,000	462,000	702,000

Required:

a. Compute the predetermined overhead rate for each department if Assembly uses labor hours and Packaging uses machine hours.

b. Calculate the per unit cost for each product if departmental overhead rates are used. (Round to 2 decimal places)

c. Compute the predetermined plant-wide overhead rate based on direct labor hours.

d. Calculate the per unit cost of each product if a plantwide overhead rate is used.(Round to 2 decimal places)

e. Calculate the overhead rates for each overhead activity.

f. Calculate the per unit cost of each product if a activity rates are used to assign overhead. (Round to 2 decimal places)

Reference no: EM13590550

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