The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments, Fabrication and

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The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments, Fabrication and assembly. Data for the products and departments are listed below.
Number of Labor hrs Machine hours units 1000 per unit per unit Product Rings Dings 4 3 2000

All of the machine hours take place in the Fabrication department, which has an estimated overhead of $90,000. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $105,000.
The Aleutian Company uses a departmental overhead rates. The fabrication department uses machine hours for an allocation base, and the assembly department uses labor hours.What is the overhead cost per unit for Dings?
a. $56.75
b. $65.25
c. $23.25
d. $64.50

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Managerial Economics

ISBN: 978-0133020267

7th edition

Authors: Paul Keat, Philip K Young, Steve Erfle

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