he company is currently selling 6,400 units per month. Fixed expenses are $424,400 per month. The marketing manager believes tha
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Answer:
Part 1:
Single plant overhead rate=$17.44/hour
Part 2:
For Deluxe Model:
Overhead Cost=$43,600
For Basic Model:
Overhead Cost=$104,640
Explanation:
Part 1:
Single plant overhead rate for the year:
Single plant overhead rate for the year=Total expected Cost/direct labor hours
Total Expected Cost= Handling materials+Inspecting product +Processing purchase orders+Paying suppliers+invoices Insuring the factory +Designing packaging
Total Expected Cost=$625,000+$900,000+$105,000+$175,000+$300,000+$75,000
Total Expected Cost=$2,180,000
Direct labor hours= 125,000 hours
Single plant overhead rate=
Single plant overhead rate=$17.44/hour
Part 2:
For Deluxe Model:
Overhead Cost=Single plant overhead rate*Direct labor hours
Overhead Cost=$17.44/hour*2,500 hours
Overhead Cost=$43,600
For Basic Model:
Overhead Cost=Single plant overhead rate*Direct labor hours
Overhead Cost=$17.44/hour*6000 hours
Overhead Cost=$104,640