Multiple production department overhead rates The total factory overhead for Osp
ID: 2387395 • Letter: M
Question
Multiple production department overhead ratesThe total factory overhead for Ospina Company is budgeted for the year at $1,704,000 and divided into two departments: Fabrication, $1,344,000 and Assembly, $360,000. Morris manufactures two office furniture products: credenzas and desks. Each credenza requires four direct labor hours in Fabrication and two direct labor hours in Assembly. Each desk requires three direct labor hours in Fabrication and two direct labor hours in Assembly. Each product is budgeted for 8,000 units of production for the year.
If required, round all per unit answers to nearest whole cent.
c. Determine the factory overhead allocated per unit for each product, using the department factory overhead allocation rates.
Credenza $ per credenza
Desk $ per desk
Explanation / Answer
Total overhead assigned to production of Fabrication
$1,344,000
Total overhead assigned to production of Assembly
$360,000
Given:- Each product is budgeted for 8,000 units of production for the year
Fabrication
Cost per unit for the strawberry / Annual production
= $1,344,000/8,000 units
= 168
Overhead cost per unit is 168
Assembly
Cost per unit for the strawberry / Annual production
= $360,000/8,000 units
= 45
Overhead cost per unit is 45
Total overhead assigned to production of Fabrication
$1,344,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.