Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

mapter 7 A. Using the following Information, determine the overhead to be applie

ID: 2584025 • Letter: M

Question

mapter 7 A. Using the following Information, determine the overhead to be applied to each activity. Activity Inspection hours Setup hours Machine hours Estimated Product A. Product B Total Predetermined MOH MOH Activity Activity Activity Application rate $1,000 50 150 per hour $2,000 600 per set up $3,000 100 200 per hour 400 B. What is the MOH applied to each activity and in total for Products A & B? Product A MOH Applied Product B MOH Applied Inspection hours | Setup hours Machine hours Total MOH C. What would be the MOH applied per unit for product A if there are 50 units produced of Product A? D. What would be the MOH applied per unit for product B if there are 25 units produced of Product B?

Explanation / Answer

Solution:

Part A –

Activity

Estimated

Product A

Product B

Total

Predetermined MOH

MOH

Activity

Activity

Activity

Application Rate

(A)

(B)

(A/B)

Inspection hours

$1,000

50

150

200

$5.00

per hour

Setup hours

$2,000

400

600

1000

$2.00

per setup

Machine hours

$3,000

100

200

300

$10.00

per hour

$6,000

Part B – MOH applied to each activity

Product A

Product B

MOH Applied

MOH Applied

Inspection hours

$250

(50*$5)

$750

(200*$5)

Setup hours

$800

(400*$2)

$1,200

(600*$2)

Machine hours

$1,000

(100*$10)

$2,000

(200*$10)

Total MOH

$2,050

$3,950

Part C – MOH applied per unit for Product A

Total MOH Applied for Product A (as per part b) = $2,050

Total Production Units = 50 Units

MOH Applied Per Unit = TOTAL MOH / Total Units = $2,050 / 50 = $41 per unit

Part D – MOH applied per unit for Product A

Total MOH Applied for Product B (as per part b) = $3,950

Total Production Units = 25 Units

MOH Applied Per Unit = TOTAL MOH / Total Units = $3,950 / 25 = $158 per unit

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

Activity

Estimated

Product A

Product B

Total

Predetermined MOH

MOH

Activity

Activity

Activity

Application Rate

(A)

(B)

(A/B)

Inspection hours

$1,000

50

150

200

$5.00

per hour

Setup hours

$2,000

400

600

1000

$2.00

per setup

Machine hours

$3,000

100

200

300

$10.00

per hour

$6,000