Question

Hartley Company produces two products, Flower and Planter. Flower is a high-volume item totaling 20000 units annually. Planter is a low-volume item totaling only 6000 units per year. Flower requires 1 hour of direct labor for completion, while each unit of Planter requires 2 hours. Therefore, total annual direct labor hours are 32000 (20000 12000). Expected annual manufacturing overhead costs are $920000. Hartley uses a traditional costing system and assigns overhead based on direct labor hours. Each unit of Planter would be assigned overhead of $28.75. need more information to compute. $57.50. $35.38.

Answer 1

$57.50

Step-by-step explanation:

The computation is shown below:

Before computing the units, first we have to compute the overhead rate per hour which is shown below:

= $920,000 ÷32,000 units

= $28.75

Now the unit for assigned overhead is

= Overhead rate per hour × direct labor hours ÷ number of units

= $28.75 × 12,000 ÷ 6,000

= $28.75 × 2

= $57.50

We simply do the above calculations