Heidelberg Fabrication manufactures two products, G-09 and G-35:

Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow: 

Required

a. Heidelberg currently applies overhead on the basis of machine-hours. What is the predetermined overhead rate for the quarter?

b. Heidelberg is thinking of adopting an ABC system. It has tentatively chosen the following cost drivers: machine-hours for machine depreciation, production runs for setup labor, and direct material dollars for materials handling. Compute the cost driver rates for the proposed system at Heidelberg. 

Transcribed Image Text:

Units produced .... Direct materials cost per unit. Machine-hours per unit.. Production runs per quarter.. G-09 18,000 $7 4 144 G-35 3,600 $19 7 72