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Required information [The following information applies to the questions displayed below.] Angle Max Industries produces a...




Required information [The following information applies to the questions displayed below.] Angle Max Industries produces a pr
Required information [The following information applies to the questions displayed below.] Angle Max Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next year's expected costs and activities are shown below. Assembly Finishing Direct labor hours 189, eeeDLH 140,000 DLH Machine hours Зее, еве МН 60, eee MH $300,000 $420,000 Overhead costs Assume that the Assembly Department allocates overhead based on machine hours, and the Finishing Department allocates overhead based on direct labor hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and 2.5 machine hours in the Assembly Department, and 3.5 direct labor hours and 0.5 machine hours in the Finishing Department?
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Answer:
Overhead rate - Assembly Department
              = Estimated Overhead Costs / Machine Hours
              = $ 300,000 / 300,000 MH
$ 1 per MH
Overhead rate - Finishing Department
              = Estimated Overhead Costs / Machine Hours
              = $ 420,000 / 140,000 DLHs
$ 3 per DLH
Total overhead Assigned
   - Assembly Department
          ( $ 1 per Mh x 2.5 MH )
$ 2.50
   - Finishing Department
           ( $ 3 per DLH x 3.5 DLH )
$ 10.50
Total overhead Assigned $ 13
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