Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Standard Enhanced Total Units produced 24,000 8,000 32,000 Machine-hours 14,400 9,600 24,000 Direct labor-hours 18,000 18,000 36,000 Direct materials costs $ 480,000 $ 720,000 $1,200,000 Direct labor costs 288,000 612,000 900,000 Manufacturing overhead 864,000 Total costs $2,964,000 Required: Compute the predetermined overhead rate assuming that Redfern Audio uses direct labor costs to allocate overhead costs.
Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Standard Enhanced Total Units produced 24,000 8,000 32,000 Machine-hours 14,400 9,600 24,000 Direct labor-hours 18,000 18,000 36,000 Direct materials costs $ 480,000 $ 720,000 $1,200,000 Direct labor costs 288,000 612,000 900,000 Manufacturing overhead 864,000 Total costs $2,964,000 Required: Compute the predetermined overhead rate assuming that Redfern Audio uses direct labor costs to allocate overhead costs.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Redfern Audio produces audio equipment
including headphones. At the Campus Facility, it
produces two wireless models, Standard and
Enhanced, which differ both in the materials
and components used and in the labor skill
required. Data for the Campus Plant for the third
quarter follow. Standard Enhanced Total Units
produced 24,000 8,000 32,000 Machine-hours.
14,400 9,600 24,000 Direct labor-hours 18,000
18,000 36,000 Direct materials costs $ 480,000
$ 720,000 $1,200,000 Direct labor costs
288,000 612,000 900,000 Manufacturing
overhead 864,000 Total costs $ 2,964,000
Required: Compute the predetermined
overhead rate assuming that Redfern Audio
uses direct labor costs to allocate overhead
costs.
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