Question

homeworklib The Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. Product Number of Units Labor Hours Per Unit Machine Hours Per Unit Blinks 964 3 5 Dinks 1,943 5 8 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $103,800. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $79,600. The Ramapo Company uses a single overhead rate to apply all overhead costs based on labor hours. What is the overhead cost per unit for Blinks

Answer 1

Overhead per unit of Blinks= $43.65

Step-by-step explanation:

Giving the following information:

Product Number of Units Labor Hours Per Unit

Blinks 964 3

Dinks 1,943 5

First, we need to calculate the total estimated overhead and the total number of labor hours:

Total estimated overhead= 103,800 + 79,600= $183,400

Total number of labor hours= (964*3) + (1,943*5)= 12,607

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 183,400 / 12,607

Predetermined manufacturing overhead rate= $14.55 per direct labor hour

Finally, we can allocate overhead to Blinks:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Blinks= 14.55*3= $43.65