Question

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. Product Number of units Labor hours per unit Machine hours per unit Blinks 1,000 4 5 Dinks 2,000 2 8 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $84,000. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $72,000. 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 Blinks? Group of answer choices A. $19.50 B. $56.00 C. $37.45 D. $78.00

Question 6 1 pts 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. Labor hours per unit Machine hours per unit Number of units 1,000 2,000 Product Blinks Dinks All of the machine hours take place in the Fabrication department, which has an estimated overhead of $84,000. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $72,000. 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 Blinks? $19.50 $56.00 $37.45 $78.00

Answer 1

WORKING NOTES:
	CALCULATION OF RECOVERY RATE OF OVERHEAD PER HOUR
	Overhead Recevry rate per hour = Total Overhaed / Total Labor Hours
	Total Overhead = $ 84,000 + $ 72,000=	$           1,56,000
	Total Labor Hours =
	Blinks = 1000 Units X 1 Hour =	4000 Hours
	Dinks = 2000 Units X 2 Hour =	4000 Hours
	Total Hours =	8000 Hours
	Overhead Recevry rate per hour = $ 156,000 / 8,000 Hours
	Overhead Recevry rate per hour = $ 19.50 Per Hour
SOLUTION:
	CALCULATION OF OVERHEAD COST PER UNIT FOR BLINKS
	Overhead Cost of Blinks = Recovery rate per hour X Labor hours per unit
	Overhead Cost of Blinks = $ 19.50 X 4 Hours
	Overhead Cost of Blinks = $ 78.00
	Answer = Option 4 = $ 78.00