1. Calculate the predetermined plantwide overhead rate, using direct labor hours. 30 per hour Calculate the applied overhead for each product, using direct labor hours. Applied overhead Business Home 1,200,000 2. Calculate the overhead cost per unit for each product. If required, round your answers to the nearest cent. Overhead Cost Business Home 270,000 ✓ 15 per unit unit per 3. What if the business printer used 18,000 hours (to produce 18,000 units) instead of 9,000 hours (total expected hours remi profitability of this product line if all 18 000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Required:
1. Calculate the predetermined plantwide overhead rate, using direct labor hours.
30
per hour
Calculate the applied overhead for each product, using direct labor hours.
Applied overhead
Business S
270,000 ✓
1,200,000 ✓
2. Calculate the overhead cost per unit for each product. If required, round your answers to the nearest cent.
Overhead Cost
Home
Business
Home
15 per
unit
unit
6 per
3. What if the business printer used 18,000 hours (to produce 18,000 units) instead of 9,000 hours (total expected hours remain the same)? Calculate the effect on the
profitability of this product line if all 16,000 units are sold.
Profits would decrease ✓ by s 660,000 X
Transcribed Image Text:Required: 1. Calculate the predetermined plantwide overhead rate, using direct labor hours. 30 per hour Calculate the applied overhead for each product, using direct labor hours. Applied overhead Business S 270,000 ✓ 1,200,000 ✓ 2. Calculate the overhead cost per unit for each product. If required, round your answers to the nearest cent. Overhead Cost Home Business Home 15 per unit unit 6 per 3. What if the business printer used 18,000 hours (to produce 18,000 units) instead of 9,000 hours (total expected hours remain the same)? Calculate the effect on the profitability of this product line if all 16,000 units are sold. Profits would decrease ✓ by s 660,000 X
Applied Overhead and Unit Overhead Cost: Plantwide Rates
Imprimo, Inc., produces two types of ink-jet printers: business and home. Imprimo uses a plantwide rate based on direct labor hours to assign its overhead costs. The
company has the following estimated and actual data for the coming year:
$1,470,000
49,000
Estimated overhead
Expected activity
Actual activity (direct labor hours):
Business printer
Home printer
Units produced:
Business printer
Home printer
9,000
40,000
18,000
200,000
Transcribed Image Text:Applied Overhead and Unit Overhead Cost: Plantwide Rates Imprimo, Inc., produces two types of ink-jet printers: business and home. Imprimo uses a plantwide rate based on direct labor hours to assign its overhead costs. The company has the following estimated and actual data for the coming year: $1,470,000 49,000 Estimated overhead Expected activity Actual activity (direct labor hours): Business printer Home printer Units produced: Business printer Home printer 9,000 40,000 18,000 200,000
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