Determine the predetermined overhead rate

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Reference no: EM1311366

Compute the predetermined overhead rate under the current method.

Carroll Company manufactures two products, Product DRT and Product CRT.

The company estimated it would incur $130,890 in manufacturing overhead costs during the current period. Overhead currently is assigned to the products on the basis of direct labour hours. Data concerning the current periods operations appear below:

	Product DRT	Product CRT
Estimated volume	400 units	1,200 units
Direct labour hours per unit	0.70 hour	1.20 hours
Direct materials cost per unit	$10.70	$16.70
Direct labour cost per unit	$11.20	$19.20

Required:
Compute the predetermined overhead rate under the current method, and determine the total unit product cost of each product for the current year. (To establish an overhead rate, divide budgeted overhead by the expected total direct labour hours for both products together.)

Reference no: EM1311366

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