Question

Fine Furnishings manufactures upscale custom furniture. currently uses a plantwide overhead rate based on direct labor hours to allocate its of manufacturing overhead to individual jobs.​ However, ​, owner and​ CEO, is considering refining the​ company's costing system by using departmental overhead rates.​ Currently, the Machining Department incurs of manufacturing overhead while the Finishing Department incurs of manufacturing overhead. has identified machine hours​ (MH) as the primary manufacturing overhead cost driver in the Machining Department and direct labor​ (DL) hours as the primary cost driver in the Finishing Department.

Required:
Compute the plantwide overhead rate assuming that Farmers expects to incur 30,000 total.

Answer 1

$43

Step-by-step explanation:

Note: The full question is attached below as picture

Plant overhead rate = Total manufacturing overhead / Cost allocation cost base

Plant overhead rate = $1,290,000 / 30,000

Plant overhead rate = $43