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Find indirect manufacturing cost per unit using direct labor

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Reference no: EM132998340

The following information is provided for Orbit Antenna Corp., which manufactures two products: Lo-Grain antennas and Hi-Grain antennas for use in remote areas.

Activity                                            Cost                           Allocation Base

Setup                                        $58,000              Number of setups

Machine maintenance                    30,000              Number of machine hours

Total indirect manufacturing costs $88.000

                                                Lo-Grain                       Hi-Grain                      Total

Direct labor hours              1,200                         3,800                       5,000

Number of setups                   40                            40                         80

Number of machine hours      3,000                         2,000                     5,000

Orbit Antenna plans to produce 125 Lo-Grain and 225 Hi-Grain antennas.

Required:

Problem 1. Compute the indirect manufacturing cost per unit using direct labor hours for the single plantwide predetermined overhead allocation rate.

Problem 2. Calculate the indirect overhead rate for each activity using the costs and allocation bases indicated above.

Reference no: EM132998340

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