Calley's Cakes Inc. produces quality specialty cakes. Her cakes move through two departments: Bakingand Frosting. The company uses departmental overhead rates to allocate overhead costs. Overheadsare allocated based on oven-hours for Baking and direct labour cost for Frosting. Information related tocosts for last month is provided below:Annual production and sales (units)Direct materials cost per unitDirect labour cost per unit:Baking departmentFrosting departmentOven-hours per unitBaking departmentFrosting department10-inch cake.5,9005.405.007.500.250.008-inch glazed cake9,3504.304.508.000.250.50In addition, the company budgets manufacturing overhead at $49,250 in the Baking department and$55,500 in the Frosting department.Required:1. Determine the overhead application rate for each department2. Determine the total cost per unit of the two types of cakes (10-inch and 8-inch glazed)

Departmental overhead cost method is a technique to allocate all overhead costs by departments. In…

Answered: Required: 1. Determine the overhead…

Required: 1. Determine the overhead application rate for each department 2. Determine the total cost per unit of the two types of cakes (10-inch and 8-inch glazed)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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