A company uses a traditional costing overhead method with one rate for the company. They apply overhead based on direct labor hours (DLH) and they have calculated their POHR to be $27 per DLH. Direct labor cost is $30 per hour. If product A uses 45 direct labor hours to produce one unit and Product B uses 20 direct labor hours to produce one unit how much overhead will be applied to each unit of Product A and how much overhead will be applied to each unit of Product B?

Options-

Overhead for Product A $1,350 and Product B $900

Overhead for Product A $1,215 and Product B $540

Overhead for Product A $810 and Product B $600

One overhead activity is identified as Purchasing. The cost driver is pounds of material. Estimated overhead is for this activity is $120,000 and the estimated pounds of material is 10,000. Calculate the activity rate (or POHR) for Purchasing?

Using the rates calculated in the questions above for Purchasing, Quality Control, and Machinery, assign overhead to Product J which used 500 lbs of material, 1 inspection, and 750 machine hours (SHOW YOUR WORK)

One overhead activity is identified as Machinery. The cost driver is number of machine hours used. Estimated overhead for this activity is $200,000 and the estimated number of machine hours is 20,000. Calculate the activity rate (or POHR) for Machinery.