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Applied Overhead and Unit Overhead Cost: Plantwide Rates Seco, Inc., produces two types of clothes dryers: deluxe and regular. Seco uses a plantwide rate
Applied Overhead and Unit Overhead Cost: Plantwide Rates Seco, Inc., produces two types of clothes dryers: deluxe and regular. Seco uses a plantwide rate based on direct labor hours to assign its overhead costs. The company has the following estimated and actual data for the coming year: Estimated overhead $2,500,000 Expected activity 50,000 Actual activity (direct labor hours): Deluxe dryer 8,000 Regular dryer 42,000 Units produced: < Deluxe dryer Regular dryer Required: 16,000 210,000 1. Calculate the predetermined plantwide overhead rate, using direct labor hours. per hour Calculate the applied overhead for each product, using direct labor hours. Deluxe Regular Applied overhead 2. Calculate the overhead cost per unit for each product. If required, round your answers to the nearest cent. Deluxe Regular Overhead Cost per unit per unit 3. What if the deluxe product used 16,000 hours (to produce 16,000 units) instead of 8,000 hours (total expected hours remain the same)? Calculate the effect on the profitability of this product line if all 16,000 units are sold. Profits would by $
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