Wetz Manufacturing Corporation has a traditional costing system in which it appl

Question

Wetz Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, Q30V and S33B, about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $1,527,600 and the company's estimated total direct labor-hours for the year is 38,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:

Explanation / Answer

There is some problem to understand the clear figure of all part as not clearly visible.

Predetermined overhead recovery rate = Estimated overhead cost/Estimated direct labour hours = 1527600/38000 = $ 40.20 Manufacturing overhead per unit of S33B = Predetermined overhead recovery rate*Direct labour hour per unit of S33B = 40.20*1.70 = $ 68.34

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