The Bamboo Company produces two products, blinds and drapes. They are manufactur
ID: 2537350 • Letter: T
Question
The Bamboo Company produces two products, blinds and drapes. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below.
Product
Number of
Units
Labor Hours
Per Unit
Machine Hours
Per Unit
Blinds
1,000
4
5
Drapes
2,000
2
8
All of the machine hours take place in the Fabrication department, which has an estimated overhead of $84,000. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $72,000.
The Bamboo Company uses a single overhead rate to apply all overhead costs based on labor hours. What is the overhead cost per unit for blinds?
Enter your answer with dollars and cents. Make sure you put in a dollar sign. (Example $1.50)
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Product
Number of
Units
Labor Hours
Per Unit
Machine Hours
Per Unit
Blinds
1,000
4
5
Drapes
2,000
2
8
Explanation / Answer
Total estimated labour hour = (1000*4+2000*2) = 8000 hour
Overhead rate = ($84000+$72000)/8000 = $19.50 per labour hour
Overhead applied on Blinds = 1000*4*19.50 = $78000
Overhead cost per unit for blinds = $78000/1000 = $78 per unit
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