Red River Farm Machine makes a wide variety of products, all of which must be processed in the Cutting and Assembly departments. For the year, Red River budgeted total overhead of $1,390,200, of which $539,700 will be incurred in Cutting and the remainder will be incurred in Assembly. Budgeted direct labor and machine hours are as follows: Two products made by Red River are the RW22SKI and the SD45ROW. The following cost and production time information on these items has been gathered: a. What is the plantwide predetermined OH rate based on (1) direct labor hours and (2) machine hours for the upcoming year? 1. OH rate based on direct labor hours $______ per DLH 2. OH rate based on machine hours $______ per MH

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Red River Farm Machine makes a wide variety of products, all of which must be processed in the Cutting and Assembly departments. For the year, Red River budgeted total overhead of $1,390,200, of which $539,700 will be incurred in Cutting and the remainder will be incurred in Assembly. Budgeted direct labor and machine hours are as follows:

Two products made by Red River are the RW22SKI and the SD45ROW. The following cost and production time information on these items has been gathered:

a. What is the plantwide predetermined OH rate based on (1) direct labor hours and (2) machine hours for the upcoming year?

1. OH rate based on direct labor hours $______ per DLH
2. OH rate based on machine hours $______ per MH

Cutting Assembly
Budgeted
direct
labor
hours
27,000
3,000
Budgeted
machine
hours
2,100
65,800
Transcribed Image Text:Cutting Assembly Budgeted direct labor hours 27,000 3,000 Budgeted machine hours 2,100 65,800
RW22SKI SD45ROW
Direct
material
$34.85
$19.57
Direct
labor
rate in
Cutting
$20.00
$20.00
Direct
labor
rate in
Assembly
$8.00
$8.00
Direct
labor
hours in
Cutting
6.00
4.80
Direct
labor
hours in
Assembly
0.03
0.05
Machine
hours in
Cutting
0.06
0.15
Machine
hours in
Assembly
5.90
9.30
Transcribed Image Text:RW22SKI SD45ROW Direct material $34.85 $19.57 Direct labor rate in Cutting $20.00 $20.00 Direct labor rate in Assembly $8.00 $8.00 Direct labor hours in Cutting 6.00 4.80 Direct labor hours in Assembly 0.03 0.05 Machine hours in Cutting 0.06 0.15 Machine hours in Assembly 5.90 9.30
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