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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 overhead
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 $1,862,000 Expected activity 49,000 Actual activity (direct labor hours): Business printer 12,000 Home printer 37,000 Units produced: Business printer 24,000 Home printer 185,000 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 per unit Home per unit 3. What if the home printer business used 24,000 hours (to produce 24,000 units) instead of 12,000 hours (total expected hours remain the same)? Calculate the effect on the profitability of this product line if all 24,000 units are sold. Profits would by $
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