Question
Pineapple Motor Company manufactures two types of specialty electric motors, a basic motor and a turbo motor, through two production departments, Assembly and Testing. Presently,
Pineapple Motor Company manufactures two types of specialty electric motors, a basic motor and a turbo motor, through two production departments, Assembly and Testing. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering using the multiple departmental factory overhead rate method. Machine hours will be used to allocate overhead regardless of the method used. The following factory overhead was budgeted for Pineapple:
Estimated Overhead | |
Assembly Department | $240,000 |
Testing Department | $750,000 |
Total | $990,000 |
Direct machine hours were estimated as follows:
Assembly Department | Testing Department | Total | |
Basic Motor | 1,800 hours | 3,600 hours | 5,400 hours |
Turbo Motor | 1,200 hours | 2,400 hours | 3,600 hours |
Total | 3,000 hours | 6,000 hours | 9,000 hours |
Pineapple plans to produce 1,200 units of the Basic Motor and 1,200 units of the Turbo Motor. Assume that the motors use exactly the direct machine hours estimated.
DO NOT USE COMMAS, DOLLAR SIGNS, or DECIMAL POINTS in your answer. You should not need to round.
I. Use the information given above to answer the following questions if Pineapple uses the Single Plantwide Rate method of overhead allocation:
A. Single plantwide predetermined overhead rate
B. Overhead allocated to Basic Motor
1. Total
2. Per Unit
C. Overhead allocated to Turbo Motor
1. Total
2. Per Unit
II. Use the information given above to answer the following questions if Pineapple uses the Multiple Departmental Overhead Rate method of overhead allocation:
A. Predetermined overhead rate for Assembly
B. Predetermined overhead rate for Testing
C. Overhead allocated to Basic Motor for
1. Assembly
2. Testing
3. Total
4. Per Unit
D. Overhead allocated to Turbo Motor for
1. Assembly
2. Testing
3. Total
4. Per Unit
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