If the total estimated manufacturing overhead was $272,000. Under traditional costing (which assigns overhead on the basis of direct labor hours), the amount of manufacturing overhead costs are assigned t0 Mobile safe, Walk-in safe are: $435.2 $3,699.2.
Predetermined overhead rate is:
Estimated overhead cost $272,000
Estimated overhead driver 2,500
(800 + 1,700)
Predetermined overhead rate $108.8 per direct labor hour
($272,000/2,500)
The overhead cost per unit:
Mobile safe Walk-in safe
Predetermined rate $108.8 $108.8
Number of DL Hours for the product line 800 1,700
Overhead cost assigned to the product line $87,040 $184,960
Number of units 200 50
Manufacturing overhead costs assigned to each unit $435.2 $3,699.2
($87,040/200) ($184,960/50)
Therefore the amount of manufacturing overhead costs are assigned t0 Mobile safe, Walk-in safe are: $435.2 $3,699.2.
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The complete question is:
Perdon Corporation manufactures safes—large mobile safes, and large walk-in stationary bank safes. As part of its annual budgeting process, Perdon is analyzing the profitability of its two products. Part of this analysis involves estimating the amount of overhead to be allocated to each product line. The information shown below relates to overhead.
Mobile Safes Walk-in Safes
Units planned for production 200 50
Material moves per product line 300 200
Purchase orders per product line 450 350
Direct labor hours per product line 800 1,700
The total estimated manufacturing overhead was $272,000. Under traditional costing (which assigns overhead on the basis of direct labor hours), what amount of manufacturing overhead costs are assigned to: (Round answers to 2 decimal places, e.g. 12.25.)