Roddickton Manufacturing Co. has gathered the following information to develop predetermined OH rates for 2010. The company produces a wide variety of energy-saving products that are processed through two departments, Assembly (automated) and Finishing (labor intensive).
Budgeted total overhead: $600,400 in Assembly and $199,600 in Finishing
Budgeted total direct labor hours: 10,000 in Assembly and 40,000 in Finishing
Budgeted total machine hours: 76,000 in Assembly and 4,000 in Finishing
a. Compute a plantwide predetermined OH rate using direct labor hours.
b. Compute a plantwide predetermined OH rate using machine hours.
c. Compute departmental predetermined OH rates using machine hours for Assembly and direct labor hours for Finishing.
d. Determine the amount of overhead that would be assigned to a product that required 5 machine hours in Assembly and 1 direct labor hour in Finishing using the answers developed in parts (a), (b), and (c).