Question

Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below, Number of Units Direct Labor Hours per Unit Machine Hours Product per Unit Rings 920 Dings 2,070 All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $87,900. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $71,300 Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department ses machine hours as an allocation base, and the Assembly Department uses direct labor hours. The Assembly Department's factory overhead rate is Ca. 54.84 per machine hour b. 54.10 per machine hour CC. $3.20 per direct labor hour Cd. 54.55 per direct labor hour

Answer 1

Answer

--Total direct labor hour (DLH) in assembly department calculation:

= (920 x 4) + (2070 x 9)

= 3680 + 18630

= 22310 DLHs

--total assembly department overhead = $71300

--Factory overhead rate = $ 71300 / 22310 DLHs

= $ 3.20 per DLHs

--Correct answer = Option C $ 3.20