Multiple Choice Question 43 Hartley Company produces two products, Flower and Pl

Question

Multiple Choice Question 43 Hartley Company produces two products, Flower and Planter. Flower is a high-volume item totaling 20000 units annually. Planter is a low-volume item totaling only 6000 units per year Flower requires 1 hour of direct labor for completion, while each unit of Planter requires 2 hours. Therefore, total annual direct labor hours are 32000 (20000 +12000). Expected annual manufacturing overhead costs are $820000. Hartley uses a traditional costing system and assigns overhead based on direct labor hours. Each unit of Planter would be assigned overhead of O need more information to compute. $26. $32. $51

Explanation / Answer

Dear student, only one question is allowed at a time. I am answering the first question

Overhead absorption rate

= Budgeted overhead / Budgeted labor hours

= $820,000 / 32,000

= $ 25.625 per labor hour

So, Overhead assigned to planter

= Labor hours per unit x Overhead absorption rate

= 2 x $25.625

= $51.25 or $51

So, as per above calculations, option D is the correct option

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