0 Weygandt, Financial & Managerial Accounting, e Exercise 18-5 (Part Level Submi

Question

0 Weygandt, Financial & Managerial Accounting, e Exercise 18-5 (Part Level Submission) Corporation manufactures safes-arge moble safes, and large walk-in stationary bank sates. As part of les annual budgeting procecE erdon is analyzing the profitability of its two products Part of this analysis involves estmating the amount of overhead to be allecated to each peoduct ine to overhead Mobile Safes Walk-in Safes ees Submission Units planned for production 300 220 340 1,710 Dinect labor hours per product ine 810 (a) The botal estimated mansfecturing ovemead wes $283,000 Under tredeional costing (wrich assigns everheed on the basis of direct tebor hours. what ano rt of mantenrng overeed ts ore ssigad te: (Round annens ta .ee mal paeet.1226) (1) One meble sate

Explanation / Answer

Mobile safe

Manufacturing overhead cost = {[($280000) / (810 + 1710)]*810} / 190 units

= {[$280000 / 2520] * 810}/190

= $473.68

Walk in safe

Manufacturing overhead cost = {[$280000 / (810 + 1710)] * 1710} / 47 units

= $4042.55.

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