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: Estimated overhead Expected activity Actual activity (direct labor hours): Business printer Home printer Units produced: Business printer Home printer Required: $2,208,000 48,000 Business s 12,000 Home 36,000 1. Calculate the predetermined plantwide overhead rate, using direct labor hours. $ per hour Profits would 24,000 Calculate the applied overhead for each product, using direct labor hours. Applied overhead 180,000 Business Home 2. Calculate the overhead cost per unit for each product. If required, round your answers to the nearest cent. Overhead Cost per unit per unit 3. What if the business printer used 24,000 hours (to produce 24,000 units) instead of 12,000 hours (total expected hours remain the same)? Calculate the effect on the profitability of this product line if all 24,000 units are sold. by s

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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:
Estimated overhead
Expected activity
Actual activity (direct labor hours):
Business printer
Home printer
Units produced:
Business printer
Home printer
Required:
Business
Home
$2,208,000
1. Calculate the predetermined plantwide overhead rate, using direct labor hours.
per hour
Business $
48,000
Calculate the applied overhead for each product, using direct labor hours.
Applied overhead
12,000
Home
36,000
by $
24,000
180,000
2. Calculate the overhead cost per unit for each product. If required, round your answers to the nearest cent.
Overhead Cost
per unit
per unit
3. What if the business printer used 24,000 hours (to produce 24,000 units) instead of 12,000 hours (total expected hours remain the same)? Calculate the effect on the profitability of this product line if all 24,000 units are sold.
Profits would
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: Estimated overhead Expected activity Actual activity (direct labor hours): Business printer Home printer Units produced: Business printer Home printer Required: Business Home $2,208,000 1. Calculate the predetermined plantwide overhead rate, using direct labor hours. per hour Business $ 48,000 Calculate the applied overhead for each product, using direct labor hours. Applied overhead 12,000 Home 36,000 by $ 24,000 180,000 2. Calculate the overhead cost per unit for each product. If required, round your answers to the nearest cent. Overhead Cost per unit per unit 3. What if the business printer used 24,000 hours (to produce 24,000 units) instead of 12,000 hours (total expected hours remain the same)? Calculate the effect on the profitability of this product line if all 24,000 units are sold. Profits would
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