Calculating Manufacturing Overhead RatesWindsor Company, accumulated the following data for the year: Milling Department manufacturing overhead $327,600 Finishing Department manufacturing overhead $134,400 Machine hours used Milling Department 9,000 hours Finishing Department 2,000 hours Labor hours used Milling Department 1,000 hours Finishing Department 1,000 hours In the Milling department, grooves are cut into aluminum and steel rods using computer-controlled equipment. In the Finishing department, the rods are individually cleaned and polished.a. Calculate the plantwide manufacturing overhead rate using machine hours as the allocation base.$Answer per machine hourb. Calculate the plantwide manufacturing overhead rate using direct labor hours as the allocation base.$Answer per direct labor hourc. Calculate department overhead rates using machine hours in Milling and direct labor hours in Finishing as the allocation bases.$Answer per Milling Dept. machine hour$Answer per Finishing Dept. direct labor hourd. Calculate department overhead rates using direct labor hours in Milling and machine hours in Finishing as the allocation bases.$Answer per Milling Dept. direct labor hour$Answer per Finishing Dept. machine hour

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 3CE: Lansing. Inc., provided the following data for its two producing departments: Machine hours are used...

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Calculating Manufacturing Overhead Rates
Windsor Company, accumulated the following data for the year:

Milling Department manufacturing overhead	$327,600
Finishing Department manufacturing overhead	$134,400
Machine hours used
Milling Department	9,000 hours
Finishing Department	2,000 hours
Labor hours used
Milling Department	1,000 hours
Finishing Department	1,000 hours

In the Milling department, grooves are cut into aluminum and steel rods using computer-controlled equipment. In the Finishing department, the rods are individually cleaned and polished.

a. Calculate the plantwide manufacturing overhead rate using machine hours as the allocation base.
$Answer per machine hour

b. Calculate the plantwide manufacturing overhead rate using direct labor hours as the allocation base.
$Answer per direct labor hour

c. Calculate department overhead rates using machine hours in Milling and direct labor hours in Finishing as the allocation bases.
$Answer per Milling Dept. machine hour
$Answer per Finishing Dept. direct labor hour

d. Calculate department overhead rates using direct labor hours in Milling and machine hours in Finishing as the allocation bases.
$Answer per Milling Dept. direct labor hour
$Answer per Finishing Dept. machine hour

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