24-14

FitzFitzgerald makes handheld calculators in 2 models-basic and professional. Fitzgerald estimated $812,500 of manufacturing overhead and 625,000 machine hours for the year.

1. Compute the predetermined overhead allocation rate using machine hours as the allocation base.

2. How much overhead is allocated to the basic model? To the professional model?

25-15

Fitzgerald makes handheld calculators in 2 models-basic and professional. Fitzgerald wants to refine its costing system by allocating overhead using departmental rates. The estimated $812,500 of manufacturing overhead has been divided into 2 cost pools-Assembly Department and Packaging Department. The following data have been complied.

	Assembly Department	Packaging Department	Total
Overhead Costs	$650,000	$162,500	$812,000
Machine Hours
Basic Model	162,500 MHr	87,500 MHr	250,000 MHr
Professional Model	243,750 MHr	131,250 MHr	375,000 MHr
Direct Labor Hours
Basic Model	25,000 DLHr	55,000 DLHr	80,000 DLHr
Professional Model	71,875 DLHr	148,125 DLHr	220,000 DLHr

1. Compute the predetermined overhead allocation rates using machine hours as the allocation base for the Assembly Department and direct labor hours for the Packaging Department.

2. How much overhead is allocated to the basic model? To the professional model?