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Products move through two production departments: Forming and Finishing. The company uses departmental overhead rates to allocate overhead costs. Overhead is allocated based on machine-hours
Products move through two production departments: Forming and Finishing. The company uses departmental overhead rates to allocate overhead costs. Overhead is allocated based on machine-hours in Forming and direct labour cost in Finishing Information related to costs for last year is provided below: Street Mountain Annual production and sales 6,300 9,950 (units) Direct materials cost per unit $ 4.60 $ 3.70 Direct labour cost per unit: Forming Department 1.00 $ .50 Finishing Department 6.50 7.00 Machine hours per unit: Forming Department 0.25 0.25 Finishing Department 0.00 0.50 $ $ $ In addition, the firm budgets manufacturing overhead at $55,250 in the Forming Department and $59,500 in the Finishing Department. Required: (Round your answers to 2 decimal places.) 1. Determine the overhead application rate for each department. 2. Determine the total cost per unit of street bikes and mountain bikes
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