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. Production Indirect Indirect Other Activity Labor Materials Overhead Grinding $340,000 Polishing $220,000 Product modification 500,000 Providing power $200,000 System calibration 520,000 Additional information on the drivers for its production activities follows. 1,600 engineering Grinding 14,000 machine hours Polishing 14,000 machine hours Product modification hours direct labor Providing power 14,000 hours System calibration 1,400 batches Job 3175 150 units 500 MH Number of units Machine hours Engineering hours Batches Direct labor hours Job 4286 1,875 units 5,880 MH 28 eng. hours 15 batches 4,590 DLH 35 eng. hours 5 batches 510 DLH Required: 5. If the company uses a plantwide overhead rate based on direct labor hours, what is the overhead cost for each unit of Job 3175? Of Job 4286? (Do not round Intermediate calculations. Round "OH Cost per unit" answers to 2 decimal places.) OH Cost DL hours Plantwide OH rate Total Overhead Cost Units Produced per unit Product Job 3175 Job 4286

Answer 1

Plantwide rate = Total Overheads/Total Labor hours	=1,780,000/14,000	127.1428571	per hour
Product	DL Hours	Plantwide Rate	Total OH Cost	Units produced	OH Cost per unit
Job 3175	510	127.1428571	64842.85714	150	432.29
Job 4286	4590	127.1428571	583585.7143	1875	311.25