Reference no: EM132658266
Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below.
Product Number of Units Direct Labor Hours per Unit Machine Hours per Unit
Rings 1,000 46 Dings 2,000 39
All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $90,000. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $105,000.
Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours.
Problem 1: The Assembly Department's factory overhead rate is
a. $3.75 per machine hour
b. $10.50 per direct labor hour
c. $4.38 per machine hour
d. $19.50 per direct labor hour
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