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been developed as a of the two products, requiring 3 hours of direct labor time per unit to manufacture compared to 2 hour of direct
been developed as a of the two products, requiring 3 hours of direct labor time per unit to manufacture compared to 2 hour of direct labor time for Product S. Product W is produced on an automated production line Overhead is currently assigned to the products on the basis of direct-labor-hours. The company estimated it wouled incur $1,111,943 in manufacturing overhead costs and produce 17,300 units of Product W and 86,500 units of Product S sduring the current year. Unit cost for materials and direct labor are: Product S Product W Direct material Direct labor $19 10 $27 18 Required a-1. Compute the predetermined overhead rate under the current method of allocation. a-2. Determine the unit product cost of each product for the current year b. The company's overhead costs can be attributed to four major activities. These activities and the amount of overhead cost attributable to each for the current year are given below Total Activity Total 3,710 659 18, 620 Total Cost Product SProduct w 1,220 Activity Cost Pool Machine setups required Purchase orders issued Machine-hours required Maintenance requests $567, 630 45, 471 2, 490 145 11,200 514 186,200 7, 420
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