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Imprimo, Inc., produces two types of ink-jet printers: business and home. Imprimo uses a plantwide rate based on direct labor hours to assign its
Imprimo, Inc., produces two types of ink-jet printers: business and home. Imprimo 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 $2,448,000 Expected activity 51,000 Actual activity (direct labor hours): Business printer 11,000 Home printer 40,000 Units produced: Business printer Home printer Required: 22,000 200,000 1. Calculate the predetermined plantwide overhead rate, using direct labor hours. per hour Calculate the applied overhead for each product, using direct labor hours. Applied overhead Business Home 2. Calculate the overhead cost per unit for each product. If required, round your answers to the nearest cent. Overhead Cost Business Home per unit per unit 3. What if the business printer used 22,000 hours (to produce 22,000 units) instead of 11,000 hours (total expected hours remain the same)? Calculate the effect on the profitability of this product line if all 22,000 units are sold. Profits would by $
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