red river farm machine makes a wide variety of products, all of which must be pr
ID: 2365695 • Letter: R
Question
red river farm machine makes a wide variety of products, all of which must be processed in the cutting and assembly departments. for the year 2010, red river budgeted total overhead of $993,000, of which $385,000 will be incurred in cutting and the remainder will be incurred in assembly. budgeted direct labor hours and machine hours are as follows:cutting assembly
budgeted direct labor hours 27,000 3,000
budgeted machine hours 2,100 65,800
two products made by red river are the RW22SKI and the SD45ROW. the following cost and production time information on these items has been gathered:
RW22SKI SD45ROW
direct material $ 34.85 $ 19.57
direct labor rate in cutting $ 20.00 $ 20.00
direct labor rate in assembly $ 8.00 $ 8.00
direct labor hours in cutting 6.00 4.80
direct labor hours in assembly 0.03 0.05
machine hours in cutting 0.06 0.15
machine hours in assembly 5.90 9.30
a. what is the plantwide predetermined Overhead rate based on direct labor hours and machine hours for the upcoming year?
Explanation / Answer
Cutting
Assembly
Cutting
Assembly
Budgeted total overhead $385,000 $608,000 Budgeted Direct labor hours 27,000 3,000 Budgeted Machine hours 2,100 65,800 Products RW22SKI SD45ROW Direct material $34.85 $19.57 Direct labor $20.00 $20.00 Direct labor rate in assembly $8.00 $8.00 Direct labor hours in cutting $6.00 $4.80 Direct labor hou rs in assembly $0.30 $0.05 Machine hours in cutting $0.06 $0.15 Machine hours in assembly $5.90 9.3 Predetermined overhead rate= Estimated tota manufacturing overhead cost/ Estimated total amount of the allocation base For cutting $385,000/27000 216,000 1.78 For Assembly = 608,000/24,000 $25.33 RW22SKI SD45ROW Direct material $34.85 $19.57 Direct labor 20 20Related Questions
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