Question

The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours. What is the Assembly Department overhead rate per labor hour

Answer 1

Answer:

$4.425 per labor hour

Explanation:

Note: The full question has been attached as picture

Product Rings Labor Hours = 1030 units x 4 labor hours per unit

Product Rings Labor Hours = 4,120 hours

Product Dings Labor Hours = 1810 units x 7 Labor hour per unit

Product Dings Labor Hours = 12,670 hours

Hence, the total Labor Hours = 4,120 hours + 12,670 hours = 16,790 hours

The total Assembly Department Overhead is estimated to be $74,300. Hence, the Assembly Department Overhead rate per labor hour = Total Overhead / Total Labor Hours

Assembly Department Overhead rate = $74,300 / 16,790

Assembly Department Overhead rate = $4.425