1) how do I compute plantwide rate overhead rate based on direct labor hours? 2)
ID: 2503479 • Letter: 1
Question
1) how do I compute plantwide rate overhead rate based on direct labor hours?
2) How do I find what the total overhead costs assigned to products A and B assuming that overhead costs are allocated using the plantwide rate calculated in part 1
Information:
The overhead costs ($440000) have been divided into four cost pools.
Product Number of Setups number of orders direct labor hours packaging orders total
A 50 150 1000 600
B 10 50 4000 400
Cost per a pool $60000 $100000 $200000 $80000 $440000
Explanation / Answer
1) how do I compute plantwide rate overhead rate based on direct labor hours?
Total direct labor hours = 1,000 + 4,000 = 5,000
$440,000/5,000 = $88 per direct labor hour
Answer: $88 per direct labor hour
2) How do I find what the total overhead costs assigned to products A and B assuming that overhead costs are allocated using the plantwide rate calculated in part 1
Assigned to A: 1,000*88 = $88,000
Assigned to B: 4,000*88 = $352,000
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