The Aleutian Company two P abrication and Assembly. Data for the products and de
ID: 2540818 • Letter: T
Question
The Aleutian Company two P abrication and Assembly. Data for the products and deparments are Labor hr Machine Product Rings Dings Number of units 1,000 2,000 per unit All of the machine hours take place in the Fabrication Departmen,which has an estimaned ov All of the labor hours take place in the Assembly Department, which has an estima $105,000 The Aleutian Company uses departmental overhead rates.The Fabrication Depanmer n allocation base, and the Assembly Department uses labor hours s the Assembly Department overhead rate per labor hour? $10.50 $3.75Explanation / Answer
Part 1:
Total labour hours
Units
Machine hours per unit
Rings
1000
4
4000
Dings
2000
3
6000
Total labour hours
10000
Overhead rate per labour hour
Overhead cost of Assembly Department
105000
Total labour hours
10000
Overhead rate per labour hour ($)
10.5
(105000/10000)
Part 2:
Number of set ups will be used for set up costs.
Number of inspection for inspection costs.
Number of units produced to be used for assembly.
Thus, direct labour hours shall not be used in any of three activities.
Total labour hours
Units
Machine hours per unit
Rings
1000
4
4000
Dings
2000
3
6000
Total labour hours
10000
Overhead rate per labour hour
Overhead cost of Assembly Department
105000
Total labour hours
10000
Overhead rate per labour hour ($)
10.5
(105000/10000)
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