Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below. Product Number of Units Direct Labor Hours Per Unit Machine Hours Per Unit Rings 1,170 2 8 Dings 2,280 9 8 All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $90,000. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $70,800. Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours. The total factory overhead allocated per unit of Dings is a.$53.98 b.$32.28 c.$4.24 d.$46.61
Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below.
Product |
Number of Units |
Direct Labor Hours Per Unit |
Machine Hours Per Unit |
| Rings | 1,170 | 2 | 8 |
| Dings | 2,280 | 9 | 8 |
All of the machine hours take place in the Fabrication Department, which has estimated total factory
Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours.
The total factory overhead allocated per unit of Dings is
Formula:
Cost per hour = Total factory overhead / Number of hours
Division of total factory overhead with number of hours derives the Cost per hour.
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