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How much manufacturing overhead will be allocated to running apparel? Big Trail Running Company has started to produce running apparel in addition to the trail
How much manufacturing overhead will be allocated to running apparel?
Big Trail Running Company has started to produce running apparel in addition to the trail running shoes that they have manufactured for years. They feel that a departmental overhead rate would best reflect their overall manufacturing overhead usage. Based on research the following information was gathered for the upcoming year Machining Department Finishing Department Estimated Manufacturing Overhead by Department $700,000 $100.000 Trail Running Shoes 440,000 machine hours 11,000 direct labor hours Running Apparel 60,000 machine hours 69,000 direct labor hours Manufacturing overhead is driven by machine hours for the machining department and direct labor hours for the finishing department At the end of the year, the following information was gathered related to the production of the trail running shoes and running apparel: Machining Department Finishing Department Trail Running Shoes 442.000 hours 10.500 hours Running Apparel 57,000 hours 70.000 hours O A. $167.300 O B. $799,225 OC. $166,916 OD. $200,000Step by Step Solution
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