Angle Max Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next year’s expected costs and activities are shown below. Assembly Finishing Direct labor hours 250,000 DLH 155,000 DLH Machine hours 450,000 MH 60,000 MH Overhead costs $ 450,000 $ 697,500
Assume that the Assembly Department allocates... Assume that the Assembly Department allocates overhead based on machine-hours, and the Finishing Department allocates overhead based on direct labor hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and 4.0 machine hours in the Assembly Department, and 4.4 direct labor hours and 0.8 machine hours in the Finishing Department?
Assume that Angle Max Industries allocates overhead using a plantwide overhead rate based on machine hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and 4.00 machine hours in the Assembly Department, and 4.40 direct labor hours and 0.8 machine hours in the Finishing Department?
Answer
Assembly |
Finishing |
Total |
||
A |
Overhead cost |
$450,000 |
$697,500 |
$1,147,500 |
Allocation base |
Machine hours - MHs |
Direct labor hourrs - DLHs |
||
B |
Amount of allocation base |
450000 |
155000 |
|
C = A/B |
Departmental Overhead rates |
$1.00 |
$4.50 |
|
Overhead allocation: |
||||
Allocation base used- |
||||
Machine hours in Assembly |
4 |
|||
DLHs in Finishing |
4.4 |
|||
D = Allocation base x C |
Overhead allocated |
$4.00 |
$19.80 |
$23.80 [Answer] |
Assembly |
Finishing |
Total |
||
A |
Overhead cost |
$450,000 |
$697,500 |
$1,147,500 |
B |
Allocation base: Machine hours |
450000 |
60000 |
510000 |
C = A/B |
Plantwide Overhead rate |
$2.25 |
||
Overhead allocation: |
||||
Allocation base used- |
||||
Machine hours in Assembly |
4 |
|||
Machine hours in Finishing |
0.8 |
|||
Total machine hours used |
4.8 |
|||
D = Allocation base x C |
Overhead allocated |
$10.80 [Answer] |
Angle Max Industries produces a product which goes through two operations, Assembly and Finishing, before it...
(The following information applies to the questions displayed below.) Angle Max Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next year's expected costs and activities are shown below. Direct labor hours Machine hours Overhead costs Assembly 140,000 DLH 340,000 MH $340,000 Finishing 144,000 DLH 74,800 MH $489,600 Assume that the Assembly Department allocates overhead based on machine hours, and the Finishing Department allocates overhead based on direct labor hours....
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