Exercise 17-4 (Part Level Submission) Car Truck (a1) Open Show Work LINK TO TEXT

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Exercise 17-4 (Part Level Submission)

Car

Truck

(a1)

Open Show Work

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Exercise 17-4 (Part Level Submission)

Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information.

Car

Truck

Estimated wheels produced 42,000 11,000 Direct labor hours per wheel 1 3
Total estimated overhead costs for the two product lines are $863,000.

Explanation / Answer

Estimated labour hour = (42000*1+11000*3) = 75000 Hour

Overhead rate = Estimated manufacturing overhead/Estimated labour hour

= 863000/75000

Overhead rate = $11.51 per labour hour

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