Question
XX Manufacturing Co. has gathered the following information to develop predetermined OH rates for 2022. The company produces a wide variety of energy-saving products
XX Manufacturing Co. has gathered the following information to develop predetermined OH rates for 2022. The company produces a wide variety of energy-saving products that are processed through two departments, Assembly (Cost driver: DL hrs)) and Finishing (Cost driver: Mhrs). Budgeted total overhead: $600,400 in Assembly and $210,000 in Finishing Budgeted total direct labor hours: 40,000 Direct Labour hours Budgeted total machine hours: 70,000 Machine hours Actual overhad cost: $560,000 in Assembly and $206,000 in Finishing Actual total direct labor hours: 38,000 Direct Labour hours Actual total machine hours: 68,000 Machine hours a. Compute a predetermined OH rate for Assembly Department (SP). b. Compute a predetermined OH rate for Finishing Department (SP). c. Determine the amount of overhead that would be assigned to a product that requires 5 direct labor hours in Assembly and I machine hour in Finishing departments (5P). d.Please analyze whether the Assembly and Finishing departments have underapplied or overapplied overhead cost (5P).
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