Question

Exercise 4-4-1-a2, b-c (Video) Altex Inc, manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following Information Estimated wheels produced Direct labor hours per wheel Car Truck 36,000 11,000 1 3 Total estimated overhead costs for the two product lines are $731,400 Calculate overhead rate. (Round answer to 2 decimal places,.. 12.25.) Overhead rate per direct labor hour $ Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to allocate overhead costs. Car wheels $ Truck wheels $

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

1 Answer 2 3 Part 1) 4 Overhead Rate per direct labour hour 5 = overheads / direct labour hours 6 = 731400/((36000*1)+(11000*3)) 7 = $ 10.6 Per Direct Labour Hour 8 9 So the correct answer is $ 10.60 Per Direct Labour Hour 10 11 Part 2) 12 Overhead cost assigned to car wheel 13 = direct labour hour for car wheels * overhead rate 14 = (36000*1) * 10.60 15 = $ 381600 16 17 Overhead cost assigned to truck wheel 18 = direct labour hour for truck wheels * overhead rate 19 = (11000*3) * 10.60 20 = $ 349800