Reliable Car Parts, a manufacturer of spare parts, has two production departmentslong dashAssembling and Packaging. The Assembling Department is mechanized, while the Packaging Department is labor oriented. Estimated manufacturing overhead costs for the year were $17,400,000 for Assembling and $11,700,000 for Packaging. Calculate the department predetermined overhead allocation rates for the Assembling and Packaging Departments, respectively, if the total estimated machine hours were 35,000 and labor hours were 21,000 for the year. (Round your answer to the nearest cent.)

Question

Johanna Dickerson

Business

1 January, 01:31

Reliable Car Parts, a manufacturer of spare parts, has two production departmentslong dashAssembling and Packaging. The Assembling Department is mechanized, while the Packaging Department is labor oriented. Estimated manufacturing overhead costs for the year were $17,400,000 for Assembling and $11,700,000 for Packaging. Calculate the department predetermined overhead allocation rates for the Assembling and Packaging Departments, respectively, if the total estimated machine hours were 35,000 and labor hours were 21,000 for the year. (Round your answer to the nearest cent.)

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Ella Hooper · Answer 1

Instructions are listed below

Explanation:

Giving the following information:

The Assembling Department is mechanized, while the Packaging Department is labor-oriented.

Estimated manufacturing overhead costs for the year were $17,400,000 for Assembling and $11,700,000 for Packaging.

The total estimated machine hours were 35,000 and labor hours were 21,000 for the year.

Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

Assembling:

Estimated manufacturing overhead rate = 17,400,000/35000 = $497.14 per machine hour.

Packaging:

Estimated manufacturing overhead rate = 11,700,000 / 21,000 = $557.14 per direct labor hour.