The Aleutian Company produces two products, Rings and Dings. They are manufactur

Question

The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments, Fabrication and assembly. Data for the products and departments are listed below. Product Number of units Labor hrs per unit Machine hours per unit Rings 1,000 4 6 Dings 2,000 3 9 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $90,000. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $105,000. The Aleutian Company uses a departmental overhead rates. The fabrication department uses machine hours for an allocation base, and the assembly department uses labor hours. What is the overhead cost per unit for Rings? a. $65.25 b. $23.25 c. $44.10 d. $64.50

Explanation / Answer

(D) Overhead cost for Rins Per Unit $ 64.50

Estimated Overhead Fabrication department $ 90,000 Estimated Overhead Assembly department $ 105,000 Two Products Rings Dings Total Labour Hour 4000 6000 10000 (1000units*4hour) (2000units*3hour) Mchine Hour 6000 18000 24000 (1000units*6 machine hour) (2000units*6 machine hour) Units 1000 2000 Particular Allocation Basis Total Amount Rings Dings Fabrication Department Overhead Machine Hour $ 90,000.00 $   22,500.00 $    67,500.00 Assembly Department Overhead Labour hour $ 105,000.00 $   42,000.00 $    63,000.00 Total $ 195,000.00 $   64,500.00 $ 130,500.00 Per unit Rate $ 64.50 $ 65.25

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