2. Charleston Affair determines that a departmental overhead rate should be used to allocate its $25,500 of estimated overhead costs, which can be broken down into $18,000 estimated to be incurred in the Cutting Department and the remainder estimated to be incurred in the Finishing Department. Use the following information for the company. a. Cutting (machine hours) Finishing (direct labor hours) Product K 10,000 5,000 Product M 14,000 7,500 Calculate the overhead rates for the Cutting and Finishing Departments. b. Calculate the factory overhead allocated to each product line.
2. Charleston Affair determines that a departmental overhead rate should be used to allocate its $25,500 of estimated overhead costs, which can be broken down into $18,000 estimated to be incurred in the Cutting Department and the remainder estimated to be incurred in the Finishing Department. Use the following information for the company. a. Cutting (machine hours) Finishing (direct labor hours) Product K 10,000 5,000 Product M 14,000 7,500 Calculate the overhead rates for the Cutting and Finishing Departments. b. Calculate the factory overhead allocated to each product line.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:2. Charleston Affair determines that a departmental overhead rate should be used to allocate its
$25,500 of estimated overhead costs, which can be broken down into $18,000 estimated to be
incurred in the Cutting Department and the remainder estimated to be incurred in the Finishing
Department. Use the following information for the company.
a.
Cutting (machine hours)
Finishing (direct labor hours)
Product K
10,000
5,000
Product M
14,000
7,500
Calculate the overhead rates for the Cutting and Finishing Departments.
b. Calculate the factory overhead allocated to each product line.
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