Question

The Dawson Company manufactures small lamps and desk lamps. The following shows the activities per product and the total overhead Information: Small Lamps - 3,500 units Desk Lamps - 7,900 units Setups 3,700 7,400 Inspections 9,000 15,000 Assembly (dih) 42,000 42,000 Activity Pool Setups Activity Base 11,100 24,000 73,500 Budgeted Amount $89,910 $136,800 $220,500 Inspections Assembly (dith) Calculate the overhead per unit to be charged to small lamps. a $29.61 b. $82.91 $59.22 d. 5100.67

Answer 1

Answer: c. $59.22

Explanation

Computation of the activity-based overhead rates for Small Lamps
Activity cost pool	Budgeted	Activity	Rate	Per
	Amount	Base	(A / B)
	(A)	(B)
Setups	$               89,910.00	11,100.00	$             8.10	Setup
Inspections	$              136,800.00	24,000.00	$             5.70	Inspection
Assembly	$              220,500.00	73,500.00	$             3.00	Assembly
Computation of overhead per unit to be charged to Small Lamps
Activity cost pool	Activities per product	Activity Rate	Overhead Cost
Setups	3,700.00	$                8.10	$     29,970.00
Inspections	9,000.00	$                5.70	$     51,300.00
Assembly	42,000.00	$                3.00	$   126,000.00
	Total overhead cost		$   207,270.00
	Units		3,500.00
	Overhead per unit ($207,270 3,500)		$ 59.22