Question

HOW DO I CALCULATE?

Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Indirect Materials Other Overhead Indirect Labor $390,000 Production Activity Grinding Polishing Product modification Providing power System calibration $185,000 650,000 $ 220,000 450,000 Additional information on the drivers for its production activities follows. Grinding Polishing Product modification Providing power System calibration 8,000 machine hours 8,000 machine hours 1,600 engineering hours 16,000 direct labor hours 1,000 batches Job 4286 2,375 units 4,000 MH Number of units Machine hours Engineering hours Batches Direct labor hours Job 3175 190 units 400 MH 35 eng. hours 35 batches 520 DLH 26 eng. -hours 105 batches 4,680 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.) Product DL hours Plantwide OH Total Overhead Cost Units Produced OH Cost per unit rate Job 3175 Job 4286

Answer 1

Estimated overhead	1895000	118.4375 per DLH
Estimated labor hour	16000 DLH
Product	DL hours	Plantwide OH rate	Total overhead cost	Units produced	OH cost per unit
Job 3175	520	118.4375	61587.50	190	324.14
Job 4286	4680	118.4375	554287.50	2375	233.38