Question

Number of setups 20 20 Machining hours 1000 4000 Orders packed 150 350 Number of products manufactured 600 400 If machining hours are used as a base under traditional casting, how much overhead is assigned to Product A1 each year?

Answer 1

$96,000

Step-by-step explanation:

The computation of the overhead amount assigned to Product A1 each year is shown below:

= Overhead cost incurred per year ÷ number of hours worked by machine department × machine hours at Product A1

= $480,000 ÷ 5,000 hours × 1,000 hours

= $96,000

We simply applied the above formula so that the overhead cost assigned could come