18. The Ramapo Company produces two products, Blinks and Dinks. They are manufac
ID: 2598452 • Letter: 1
Question
18.
The Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below.
All of the machine hours take place in the Fabrication department, which has an estimated overhead of $105,700. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $87,200.
The Ramapo Company uses a single overhead rate to apply all overhead costs based on labor hours. What is the overhead cost per unit for Dinks?
a. $67.30
b. $348.83
c. $16.20
d. $53.84
Product Number of
Units Labor Hours
Per Unit Machine Hours
Per Unit Blinks 1,091 4 7 Dinks 1,994 5 6
Explanation / Answer
Total labor hours =(1091*4)+(1994*5)= 14334 Overhead rate = (105700+87200)/14334= 13.4575 Overhead allocated to Dinks =(1994*5)*13.4575= 134171.3 Overhead cost per unit for Dinks = 134171.3/1994= 67.30 Option A is correct
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