Fleming, Inc., provided the following data for its two producing departments:

Machine hours are used to assign the overhead of the Polishing Department, and direct labor hours are used to assign the overhead of the Painting Department. There are 60,000 units of Frame A produced and sold and 100,000 of Frame B.

Required:
1. Calculate the overhead rates for each department.
2. Using departmental rates, assign overhead to the two products and calculate the overhead cost per unit. How does this compare with the plantwide rate unit cost, using direct labor hours?
3. What if the machine hours in Polishing were 2,000 for Frame A and 8,000 for Frame B and the direct labor hours used in Painting were 14,000 and 6,000, respectively?
Calculate the overhead cost per unit for each product using departmental rates, and compare with the plantwide rate unit costs calculated in Requirement 2.
What can you conclude from this outcome?LO1

Transcribed Image Text:

Polishing Painting Total Estimated overhead $500,000 $100,000 $600,000 Direct labor hours (expected and actual): Frame A 2,000 5,000 7,000 Frame B 3,000 15,000 18,000 Total 5,000 20,000 25,000 Machine hours: Frame A 7,000 3,000 10,000 Frame B 3,000 2,000 5,000 Total 10,000 5,000 15,000