Question

Chapter 18

The Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. Product Number of Units Labor Hours Per Unit Machine Hours Per Unit Blinks 999 4 4 Dinks 2,126 6 7 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $86,000. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $104,700. The Ramapo Company uses a single overhead rate to apply all overhead costs based on labor hours. What is the overhead cost per unit for Dinks? a. $418.82 b. $68.28 c. $22.99 d. $54.62

Answer 1

Company is using single overhead rate to apply all overhead costs on labor hours basis.

Allocation base here is Labor Hour.

So we need to calculate total overhead cost the company and total labor hours

Total Estimated Overhead Cost = Overhead Cost of Fabrication Dept $86,000 + Overhed Cost of Assembly Dept $104,700

= $190,700

Allocation Base is Total Estimated Labor HOurs = Please provide the Units Produced in Assembly department and Number of Hours needed per unit labor hour so that i can calculate the requried problem...

Your data is confusing

Overhead Cost per labor hour = Total Overhead $190,700 /Total Direct Labor Hours

Overhead Cost per unit = Labor HOurs needed per unit for making a Dinks x Overhead Rate