Answer:
total overhead costs for blending department = $342,000
total machine hours blending department = 2,960
overhead rate per machine hour = $342,000 / 2,960 hours = $115.5405405 per machine hour
total overhead costs for packaging department = $324,000
total direct labor hours packaging department = 800
overhead rate per direct labor hour = $324,000 / 800 hours = $405 per machine hour
product blending department packaging department
Whole milk 1,210 x $115.54 = $139,804 260 x $405 = $105,300
Skim milk 980 x $115.54 = $113,230 280 x $405 = $113,400
Cream 770 x $115.54 = $88,966 260 x $405 = $105,300
total $342,000 $324,000
total overhead rate assigned to each product:
product blending dep. packaging dep. total
Whole milk $139,804 $105,300 $245,104
Skim milk $113,230 $113,400 $226,630
<u>Cream $88,966 $105,300 $194,266 </u>
total $342,000 $324,000 $666,000
