Question
Angle Max Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next years expected costs
Angle Max Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next years expected costs and activities are shown below.
| Assembly | Finishing |
Direct labor hours | 100,000 DLH | 140,000 DLH |
Machine hours | 300,000 MH | 60,000 MH |
Overhead costs | $330,000 | $450,000 |
Assume that the Assembly Department allocates overhead based on machine hours, and the Finishing Department allocates overhead based on direct labor hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and 2.5 machine hours in the Assembly Department, and 3.5 direct labor hours and 0.5 machine hours in the Finishing Department?
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