The Ramapo Company produces two products, Blinks and Dinks. They are manufacture

Question

The Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. Product Number of units Labor hrs per unit Machine hours per unit Blinks 934 1 7 Dinks 2,192 7 7 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $86,695. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $100,089. The Ramapo Company uses a single overhead rate to apply all overhead costs based on labor hours.

What is the overhead cost per unit for Blinks? Round to the nearest cent. Select the correct answer.

a. $80.32

b. $100.09

c. $87.23

d. $11.47

Explanation / Answer

Solution :

overhead cost per unit for Blinks = (934x1 + 2192x7)/(86698+100089)

=$11.47

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