Direct labor hours Direct labor cost Machine hours Overhead Machining Assembly 1

Question

Direct labor hours Direct labor cost Machine hours Overhead Machining Assembly 16,000 12,000 $20,000 $15,000 5,000 100 $25,000$30,000 1,000 Question 1 of 1 Assuming that overhead in the machining department is allocated on the basis of machine hours, and overhead in the assembly department is allocated on the basis of direct labor cost, the departmental overhead rates per unit of the related allocation bases in the Machining and Assembly Departments respectively will be: 11096 and S15.00. s5.00 and 50%. O S5.00 and 200%. $8.00 and 50%.

Explanation / Answer

CALCULATION OF THE OVERHEAD RATE OF MACHIENING DEPARTMENT Overhead rate = Machiening Overhead / Machine Hours Overhead rate = $ 25,000 / 5,000 MH Overhead rate = $ 5 Per machiene Hours CALCULATION OF THE OVERHEAD RATE OF ASSEMBLY DEPARTMENT Overhead rate = Assemble Overhead / Direct Labour Cost Overhead rate = $ 30,000 / 15000 Overhead rate = $ 2.00 or 200% So, Answer = Option 3 = $ 5 and 200%

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