Question

HOW DO I CALCULATE?

Smythe Co. makes furniture. The following data are taken from its production plans for the year. Direct labor costs $5,750,000 620,000 Hazardous waste disposal costs Chairs Tables 21,000 units 16,200 DLH 600 pounds 211,000 units 262,000 DLH 200 pounds Expected production Direct labor hours required Hazardous waste disposed Required: 1. Determine the hazardous waste disposal cost per unit for chairs and for tables if costs are assigned using a single plantwide overhead rate based on direct labor hours. OH $ per direct labor hour Product Activity Driver Total Overhead Cost Units Produced OH Cost per unit Chairs Tables 2. Determine hazardous waste disposal costs per unit for chairs and for tables if costs are assigned based on the number of pounds disposed of. OH $ per pound OH Cost per unit Product Activity Driver Total Overhead Cost Units Produced Chairs Tables

Answer 1

Answer

• [1]

Hazardous Waste Disposal Costs	$620,000	$                           2.23	per direct labor hours
No. of DLHs	278,200
Product:	Activity Driver	OH $ per DLH	Total Overhead Costs	Units Produced	OH Cost per unit
Chairs	262,000	2.23	$584,260	211,000	$                             2.77
Tables	16,200	2.23	$36,126	21,000	$                             1.72

• [2]

Hazardous Waste Disposal Costs	$620,000	$                      775.00	per pound disposed off
No. of pound disposed of	800
Product:	Activity Driver	OH $ per DLH	Total Overhead Costs	Units Produced	OH Cost per unit
Chairs	200	$                      775.00	$155,000	211,000	$                             0.73
Tables	600	$                      775.00	$465,000	21,000	$                           22.14