Question

Required Information The following information applies to the questions displayed below.) Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Indirect Tabor $360,000 Indirect Materials Other Overhead Production Activity Grinding Polishing Product modification Providing power System calibration $185,000 600,000 540,000 $220,000 Additional information on the drivers for its production activities follows. Grinding Polishing Product modification Providing power System calibration 15,000 machine hours 15,000 machine hours 1,700 engineering hours 17.000 direct labor hours 1,150 batches Job 3175 190 units 300 MH eng. Number of units Machine hours Engineering hours Batches Direct labor hours Job 4286 2,375 units 3,000 MH 34 eng. 27 hours 34 hours 10 batches 480 DLH 30 batches 4,320 DLH

Answer 1

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Overhead cost	$ 19,05,000	$          112.06	per direct labor hour
Direct labor hours	17,000
	(a)	(b)	(c)	(d)	(e)
Product	DL hours	Plant-wide OH rate	Total overhead cost	units produced	OH cost per unit
			(a) X (b)		(c) / (d)
Job 3175	480	$          112.06	$    53,788	190	$                283.10
Job 4286	4,320	$          112.06	$ 4,84,094	2,375	$                203.83
Computation of plant-wide overhead rate based on Direct labor hours:
Indirect labor	=	$    15,00,000
Indirect materials	=	$      1,85,000
Overheads	=	$      2,20,000
Total Overheads	=	$    19,05,000
Total Direct labor hours	=	17,000
Overhead cost per unit	=	$          112.06