The Orel Company manufactures products in two departments: Mixing and Packaging.

Question

The Orel Company manufactures products in two departments: Mixing and Packaging. The company was allocating manufacturing overhead using a single plantwide rate of $2.23 wth direct labor hours as the allocation base. The company has refined its allocation system by separating manufacturing overhead costs into two cost poolsone for each department. The estimated costs for the Mixing Department, $475,000, will be allocated based on direct labor hours, and the estimated direct labor hours for the year are 190,000. The estimated costs for the Packaging Department, $110,250, will e allocated based on machine hours, and the estimated machine hours for the year are 35,000. In October, the company incurred 57,000 direct labor hours in the Mixing Department and 11,000 machine hours in the Packaging Department. Read the reguirements Requirement 1. Compute the predetermined overhead allocation rates. Round to two decimal places. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each department. Predetermined OH allocation rate Mixing Packaging Requirement 2. Determine the total amount of overhead allocated in October Begin by selecting the formula to allocate overhead costs overhead costs Compute the overhead allocated in October for each department and the total for both departments. Mixing [ Packaging Total

Explanation / Answer

Pre-determined Oh rate: Mixing Department: Estimated Overheads      / Direct labour hours Pre-determined OH rate 475000     / 190000    = 2.50 per DLH Packagin Department: Estimated Overheads     / Machine Hours   = Pre-determined Oh rate 110250        / 35000   = 3.15 per MH Overheads allocated: Mixing department: Direct Labour hours     * Pre-determined OH rate   = Allocated MFG Overheads 57000   * 2.5 142500 Packaging Department Machine hours      * Pre-determined OH rate   = Allocated Mfg Overheads 11000     * 3.15       = 34650 Total Overheads: Mixing 142500 Packaging 34650 Total Overheads: 177150

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.