Blair Manufacturing (mathrm{Co}). has gathered the following information to develop predetermined (mathrm{OH}) rates for the year. The
Question:
Blair Manufacturing \(\mathrm{Co}\). has gathered the following information to develop predetermined \(\mathrm{OH}\) rates for the year. The company produces a wide variety of houseware products that are processed through two departments, Assembly (automated) and Finishing (labor intensive).
Budgeted total overhead: \(\$ 275,000\) in Assembly and \(\$ 458,000\) in Finishing Budgeted total direct labor hours: 18,000 in Assembly and 30,000 in Finishing Budgeted total machine hours: 96,000 in Assembly and 9,000 in Finishing Answer the following questions, rounding all answers to two decimal places.
a. Compute a plantwide predetermined \(\mathrm{OH}\) rate using direct labor hours.
b. Compute a plantwide predetermined \(\mathrm{OH}\) rate using machine hours.
c. Compute departmental predetermined \(\mathrm{OH}\) rates using machine hours for Assembly and direct labor hours for Finishing.
d. Determine the amount of overhead that would be allocated to a product that required ten machine hours in Assembly and two direct labor hours in Finishing using the answers developed in (a), (b), and (c).
Step by Step Answer:
Cost Accounting Foundations And Evolutions
ISBN: 9781618533531
10th Edition
Authors: Amie Dragoo, Michael Kinney, Cecily Raiborn