Kamper Company sells two products Big Z and Little Z. Current direct materlal an

Question

Kamper Company sells two products Big Z and Little Z. Current direct materlal and directfabor costs are detalled below. Next year, the company wishes to use a plantwide overhead rate with direct labor hours as its allocation base. Next year's overhead is estimated to be $480,000. The direct labor and direct materials costs are estimated to be consistent with the current year. Direct labor costs $20 per hour and the company expects to manufacture 37000 units of Big Z and 14,000 units of Little Z next year Direct Material per Direct Labor Dollars per Unit $17 $13 Unit $11 $17 Big z Little What are total estimated direct labor hours for this next year? O 40550 total DLH. O 811,000 total DLH. O 329412 total DLH O 1530000 total DLH O 1140.412 total DLH.

Explanation / Answer

Solution:

Hence first option is correct.

Computation of estimated direct labor hours Particulars Big Z Little Z Total Direct labor dollar per unit $17.00 $13.00 Direct labor cost per hour 20 20 Direct labor hour per unit 0.85 0.65 Nos of expected units 37000 14000 Estimated number of direct labor hours 31450 9100 40550

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