Clemson Co. incurs $700,000 of overhead costs each year in its three main depart

ID: 2376601 • Letter: C

Question

Clemson Co. incurs $700,000 of overhead costs each year in its three main departments, machining ($400,000), inspections ($200,000) and packing ($100,000). The machining department works 4,000 hours per year, there are 600 inspections per year, and the packing department packs 1,000 orders per year.  Information about Clemson%u2019s two products is as follows:
                                          Product X        Product Y
       Machining hours              1,000             3,000
       Inspections                        100                500
       Orders packed                   350                650
       Direct labor hours            1,700              1,800

If traditional costing based on direct labor hours is used, how much overhead is assigned to Product X this year?

$340,000

Explanation / Answer

$340,000

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Clemson Co. incurs $350,000 of overhead costs each year in its three main depart

Clemson Co. incurs $700,000 of overhead costs each year in its three main depart

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Clemson Co. incurs $700,000 of overhead costs each year in its three main depart

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