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.