contestada

Boat Builders Incorporated budgets overhead cost of $1,680,000 for the year; of this amount, $960,000 is traceable to the Assembly department and $720,000 is traceable to the Finishing department. The company manufactures two types of boats: Fishing and Yachts. Budgeted direct labor hours for the Fishing model are 28 in Assembly and 4 in Finishing. Budgeted direct labor hours for the Yacht model are 36 in Assembly and 12 in Finishing. The company budgets production of 400 units of the Fishing model and 400 units of the Yacht model for the year. Compute departmental overhead rates for each department using direct labor hours for that department Multiple Choice

Respuesta :

michell96

The overhead rate for the assembly department is $37.5 per hour, while the overhead rate for the finishing department is  $112.5 per hour.

In business, the overhead rate refers to the production cost of a service or product. This rate is calculated using the following equation:

  • Overhead rate = Manufacturing overhead cost / total amount of the allocation base (hours that production takes)

Based on this, let's calculate the rate for each department:

  • Assembly department:

The manufacturing overhead cost is  $960,000

  • Direct labor hours:

Fishing model: 28 hours x 400 units = 11,200

Yacht: 36 hours x 400 units = 14,400

Total direct labor hours = 11,200 + 14,400 = 25,600

Overhead rate = $960,000 / 25, 600 = $37.5 per hour

Finishing department:

The manufacturing overhead cost is $720,000

Direct labor hours:

Fishing model: 4 hours x 400 units = 1,600

Yacht: 12 hours x 400 units = 4,800

Total direct labor hours = 1,600 + 4,800 = 6,400

Overhead rate = $720,000/ 6,400 = $112.5 per hour

Learn more in: https://brainly.com/question/12928151

Otras preguntas