Freeze Frame, Inc. produces cameras that require three processes, A, B, and C, t

Question

Freeze Frame, Inc. produces cameras that require three processes, A, B, and C, to complete Digital camera model #789 is the best-selling of all the many types of cameras produced Information related to the 550,000 units of digital camera model #789 produced annually is shown below Direct materials Direct labor $450,000 ment A (7,000 DLH x $21 per DLH artment B (25,000 DLHx $19 per DLH artment C (10,000 DLHx $26 per DLH $147,000 $475,000 $260,000 Machine Hours epartment A ent B 42,000 MH 23,000 MH 38,000 MH artment C Freeze Frame's total expected overhead costs and related overhead data are shown below: artment A artment B Direct labor hours Machine hours Manufacturing overhead costs artment C 90,000 DLH 75,000 DLH 42,000 DLH 67.500 MH 135,000 MH 53,200 MH $399,000 $540,000 $675,000 a. Compute a departmental overhead rate for department A based on direct labor hours b. How much overhead is associated with model 789 from department A? c. Compute a departmental overhead rate for department B based on direct labor hours. d. How much overhead is associated with model 789 from department B? e. Compute a departmental overhead rate for department C based on direct labor hours. f. How much overhead is associated with model 789 from department C? g. What is the per unit cost of the 550,000 units of model 789?

Explanation / Answer

a.departmental overhead rate for department A = total department overhead cost /labour hours of the department A

=> $540,000 / 90,000 DLH

=>$6 per DLH.

b.overhead related to model 789 in dept A= direct labour hours * rate per DLH

=>7,000 labour hours* $6 =>$42,000.

c.departmental overhead for B = total overhead of dept B / total labour hours of B

=>$675,000 / 75,000

=>$9 per DLH.

d.overhead of 789 from department B = direct labour hours * rate per DLH

=>25,000 labour hours * $9

=>$225,000.

e.departmental overhead for department C = estimated overhead for dept C / direct labour hours of dept C

=>$399,000 / 42,000

=>$9.50.

f. overhead associated to model 789 from dept c = direct labour hours * rate =>10,000 hours * $9.50

=>$95,000..

g. per unit cost of 550,000 units of model 789 = $3.08 (calculation is shown below):

direct material cost (given) $450,000 direct labour (147,000 + 475,000 + 260,000) $882,000 overhead (42,000+225,000+ 95,000) $362,000 total cost for 550,000 units $1,694,000 cost per unit ($1,694,000 / 550,000) $3.08 per unit

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.