Question

Maverick Mfg has been struggling financially. They currently utilize a plantwide overhead rate based on direct-labor hours (DLH). Using the information below, calculate the requested amounts. Maverick currently has two product lines, A Product and 8 Product. 6,000 units of the A Product and 5,000 units of B Product are manufactured each month. All products in the A Product line have the same activity requirements, that is no one product within the line requires more machine-hours, setups, or direct-labor hours than the other products in the line. Total manufacturing overhead is $1,235,000 and is broken out by activity measure below Estimated Expected Activity Measure Overhead Cost Activity Machining Machine-hours $630,000 7,000 MHs Machine setups setups $160,000 80 setups Product design 5 products #products $125,000 General Direct labor- hours factory $320,000 2,000 DLHs Activity Measure A Machine-hours 5,000 2,000 # setups 50 10 # of products 4 Direct labor-hours 1,800 200 Manufacturing overhead for the Aproduct line appearing on Maverick's current income statement is:

Answer 1

Calculation of acturity rate for Achuity Activity Estimated & Driver duerhead lost each actiunity- Estimated Activity Activity Rate Machening Machine Hours $630000 Machine Cetube Setups $160000 Product Designing Products $125000 General factory Direct lobour & 320000 7000 MMS $90 80 setups $2000 5 producte $25000 2000 LHA $160 General factory Hours $1235000

Manufacturing duerhead for the A product line I Machining = 5000 M Ms X S90 = $450000 Machine Setups - 50 Setups X 82000 = $ 100000 Product Deien = 4 products X $ 25000 = $100000 heneral factory - 1800 SC He X I 160 = $ 488000 $938000 Manufacturing duerhead for the B Product Machining = 2000 M Hc X Machine letups = 10 Setups X Product Design - I products X General factory = 2000 LH & X & 90 - $ 180000 I 2000 - 2000 $ 25000 = $25000 4 160 = $32000 $239000