Question

Cost Pool	Estimated Overhead
Maintenance	$40,000
Setup	$20,000
Quality Control	$30,000
Ordering & Receiving	$50,000
Expected Activity	Desks	Tables	Chairs	Total
Machine Hours	500	200	300	1,000
Batches	25	35	20	80
Inspections	60	10	30	100
Purchase Orders	25	10	15	50
Units	800	650	2,000	3,450
Budget Data	Desks	Tables	Chairs	Total
Sales	$250,000	$240,000	$220,000	$710,000
Direct Materials	$50,000	$60,000	$45,000	$155,000
Direct Labor	$30,000	$35,000	$25,000	$90,000

Assuming machine hours are used to allocate overhead, what is the profit per table using the single plant-wide rate?

Group of answer choices

$191.92

None of these answers is correct.

$361.54

$229.91

$189.23

Answer 1

Overhead rate = total overhead / total machine hours

= 140,000 / 1000

= $ 140 per machine hour

Overhead of table department = $140 * 200 MH

$ 20,000

COMPUTATION OF TOTAL COST :

Sales	240,000
(-) Direct material cost	60,000
Direct labor cost	35,000
Overhead cost	28,000
Gross profit	117,000
Number of units	650
Profit per unit	$ 180
Option : None of the answer is correct

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