2. Compute the overhead cost per unit for each product using departmental rates.

Question

2. Compute the overhead cost per unit for each product using departmental rates. in calculating departmental rates, use machine hours for Department 1 and direct labor hours for Department 2. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required Departmental rates: Department 1 Department 2 Overhead cost per unit: Scientific Business 1.85 per machine hour 0.86 per direct labor hour X per unit X per unit Repeat using direct labor hours for Department 1 and machine hours for Department 2. Round departmental rates a nd the overhead cost per unit to the nearest cent ifrounding is required. Departmental rates Department 1,87 per drect sbor hour 8.30 per machine hour Department 2 Overhead cost per unit: Scientific Business 3. Compute the overhead cost per unit for each product using activity-based costing. Round your calculations and answers to the nearest per unit per unit Previous Check My Work

Explanation / Answer

Particulars Calculation per unit cost 1) Budgeted overhead per labor hour (858000+805750)/(176300+938000) 1.49 Overhead cost per unit for each product Scientific (1.49*101300)/77000 1.96 Business (1.49*1013000)/770000 1.96 2) a) Using machine hours for department 1 and direct labor hours for department 2 Department1 (858000/462840) 1.85 Department2 805750/938000 0.86 overhead cost per unit: Scientific ((1.85*26600)+(0.86*26300))/77000 0.933 Business (1.85*436240)+(0.86*911700))/770000 2.07 b) Using labor hours for department 1 and machine hours for department 2 Department1 (858000/176300) 4.87 Department2 805750/97060 8.30 overhead cost per unit: Scientific ((4.87*75000)+(8.30*24300))/77000 7.363 Business (4.84*101300)+(8.30*72760))/770000 1.42

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