Answer:
$86
Explanation:
The total overhead for Rowland Co. = $652,000 per annum (p/a). broken down across two departments as follows:
Department/Item (Treadmill) || (Weight Machine)
(Direct labor hours in production) Total
Fabrication = $460,000 p/a 3 || 2
Assembly = $192,000 p/a 1 || 5
Nos of Units for production 4000 || 4000
To produce 4000 Weight Machines, would require 8000 fabrication hours and 20,000 assembly hours. while, 4000 treadmills will require 12,000 fabrication hours and 4,000 assembly hours.
Total number of Fabrication hours for the year is 12,000 + 8,000 = 20,000.
Total number of assembly hours for the year is 20,000 + 4,000 = 24,000
Unit cost per hour of fabrication (uF) = $460,000/20,000 = $23
Unit cost per hour of assembly (uA) = $192,000/24,000 = $8
Therefore, the allocated overhead per unit for each weight machine
= (2 * $23) + (5 * $8) = $46 + $40 = $86
