Question

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 hrs per unit ​ Machine hours per unit Blinks 1,000 4 5 Dinks 2,000 2 8 ​ All of the machine hours take place in the Fabrication department, which has an estimated overhead of $84,000. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $72,000. ​ The Ramapo Company uses a single overhead rate to apply all overhead costs based on labor hours. What is the Single Plantwide Factory Overhead Rate for Blinks? Group of answer choices $19.50 $37.45 $78.00 $56.00

Answer 1

Single Overhead Absorption rate = $19.5 per hour

Step-by-step explanation:

Overhead absorption rate = Estimate overhead /Estimated labor hours

Estimated overhead = $84,000 + $72,000= 156 000

Estimated labour hours= ( 1000×4) + (2000× 2)=8,000 hours

Overhead absorption rate = 156,000/8,000 hours =$19.5 per hour

Single Overhead Absorption rate = $19.5 per hour