ragon makes handheld calculators in two models--basic and professional--and wants to refine its costing system by allocating overhead using departmental rates. The estimated $1,149,500 of manufacturing overhead has been divided into two cost pools: Assembly Department and Packaging Department. The following data have been compiled: LOADING... (Click the icon to view the data.) Read the requirements LOADING... . Compute the predetermined overhead allocation rates using machine hours as the allocation base for the Assembly Department and direct labor hours for the Packaging Department. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each department. (Abbreviation used: Qty = quantity. Enter the allocation rates to the nearest cent.) Predetermined OH Estimated overhead costs ÷ Estimated qty of the allocation base = allocation rate Assembly 660,000 ÷ 300,000 = 2.2 Packaging 489,500 ÷ 611,875 = 0.8 How much overhead is allocated to the basic model? To the professional model? Begin by selecting the formula to allocate overhead (OH) costs. (Abbreviation used: Qty = quantity.) Predetermined OH allocation rate × Actual qty of the allocation base used = Allocated mfg. overhead costs Compute the total overhead allocated to the basic model, and then compute the total overhead allocated to the professional model. Basic Model Manufacturing overhead—Assembly Manufacturing overhead—Packaging Total manufacturing overhead cost Professional Model

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Aragon

makes handheld calculators in two models--basic and professional--and wants to refine its costing system by allocating overhead using departmental rates. The estimated

$1,149,500

of manufacturing overhead has been divided into two cost pools: Assembly Department and Packaging Department. The following data have been compiled:

(Click

the icon to view the data.)

Read the

requirements

Compute the predetermined overhead allocation rates using machine hours as the allocation base for the Assembly Department and direct labor hours for the Packaging Department.

Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each department. (Abbreviation used: Qty = quantity. Enter the allocation rates to the nearest cent.)

						Predetermined OH
	Estimated overhead costs	÷	Estimated qty of the allocation base	=	allocation rate

Assembly

660,000

300,000

2.2

Packaging

489,500

611,875

0.8

How much overhead is allocated to the basic model? To the professional model?

Begin by selecting the formula to allocate overhead (OH) costs. (Abbreviation used: Qty = quantity.)

Predetermined OH allocation rate

Actual qty of the allocation base used

Allocated mfg. overhead costs

Compute the total overhead allocated to the basic model, and then compute the total overhead allocated to the professional model.

	Basic Model
Manufacturing overhead—Assembly
Manufacturing overhead—Packaging
Total manufacturing overhead cost

Professional Model

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