Rafner Manufacturing identified the following budgeted data in its two productio

Question

Rafner Manufacturing identified the following budgeted data in its two production departments.

Rafner Manufacturing identified the following budgeted data in its two production departments.

Required:
What are the company's departmental overhead rates if the assembly department assigns overhead based on direct labor hours and the finishing department assigns overhead based on machine hours?

Assembly Finishing Manufacturing overhead costs $ 1,120,800 $ 510,000 Direct labor hours 11,100 DLH 19,100 DLH Machine hours 5,100 MH 15,100 MH

Explanation / Answer

Predetermined Overhead rate for Assembly department

(A)

Estimated manufacturing Overheads

$ 1,120,800.00

(B)

Estimated direct labor hours

11100

(A/B)

Predetermined Overhead rate

$    100.97

Predetermined Overhead rate for Finishing department

(A)

Estimated manufacturing Overheads

$   510,000.00

(B)

Estimated Machine hours

15100

(A/B)

Predetermined Overhead rate

$ 33.77

Predetermined Overhead rate for Assembly department

(A)

Estimated manufacturing Overheads

$ 1,120,800.00

(B)

Estimated direct labor hours

11100

(A/B)

Predetermined Overhead rate

$    100.97

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