Question

5 Connect Assignment Saved Help Save & Exit Submit Exercise 5-16 Overhead Application (LO3, LO5) Sportway Inc. produces high-quality tennis racquets and golf clubs using a patented forming process and high-quality hand-finishing 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 Tennis Racquets 5,500 $ 5.00 Golf clubs 8,750 $ 3.90 Annual production and sales (units) Direct materials cost per unit Direct labour cost per unit: Forming Department Finishing Department Machine hours per unit: Forming Department Finishing Department $ $ 2.ee 8.50 $ 1.50 $ 9.00 0.25 0.25 0.00 0.50 In addition, the firm budgets manufacturing overhead at $43,250 in the Forming Department and $51,500 in the Finishing Department Required: 1. Determine the overhead application rate for each department. (Round your answers to 2 decimal places.)

Answer 1

Answer with full working note is given below

1. Forming Department Finishing Department $12.14 $0.41 Per MH Per DL $ Working Note Manufacturing Overhead Total Machine hours Total Direct Labor cost Forming Finishing Department Department $43,250 $51,500 3,562.50 $125,500 $12.14 Machine Hour rate Per Direct Labor $ $0.41 Tennis Racquets Total Golf Clubs 8,750 Units 5,500 Forming Department Machine hours Total Machine hours 0.25 1,375.00 0.25 2,187.50 3,562.50 Finishing Department Direct Labor cost per unit Total Direct Labor cost $8.50 $46,750 $9.00 $78,750 $125,500 2. Total cost per unit Tennis Racquets $5.00 Golf Clubs $3.90 $2.00 $8.50 $1.50 $9.00 Direct Material Direct Labor Forming Department Finishing Department Overheads Forming Department Finishing Department Total Cost per unit $3.04 $3.49 $3.04 $3.69 $21.13 $22.02