Question

Scoresby Co. uses 6 machine hours and 2 direct labor hours to produce Product X. It uses 8 machine hours and 16 direct labor hours to produce Product Y. Scoresby's Assembly and Finishing departments have factory overhead rates of $240 per machine hour and $160 per direct labor hour, respectively. How much total factory overhead will be allocated to a unit of each of the two products

Answer 1

For product X = $1,760

And for product Y = $4,480

Step-by-step explanation:

The computation of total factory overhead cost for two products are as follows

For product X and Product Y

= Number of machine hours × factory overhead rate per machine hour + Number of direct labor hours × factory overhead rate per direct labor hour

= 6 × $240 + 2 × $160 + 8 × $240 + 16 × $160

= $1,440 + $320 + $1,920 + $2,560

= $1,760 + $4,480

= $6,240

So for product X = $1,760

And for product Y = $4,480