Fleming Inc. provided the following dat afor its two producing departments:
Polishing Painting Total
Estimated overhead $500000 $100000 $600000
Direct Labor Hours
(expecte and actual):
Frame A 2000 5000 7000
Frame B 3000 15000 18000
Total 5000 20000 25000
Frame A 7000 3000 10000
Frame B 3000 2000 5000
Total 10000 5000 15000
Machiene hours are used to assign the overhead of the polishing department and direct labor hours are used to assign to the painting departemnt. there are
60000 units of frame A produced and sold and 100000 of frame B.
1. Calculate the overhead rates for each department
2. Using departmental rates assign overhead to the two products and calculate the overhead cost per unit. How does this compare with the plantwide rate unit
cost using diferent labor hours?
3. What if the machine hours in polishing were 2000 for frame A and 8000 for frame B and the direct labor hours used in painting were 14000 and 6000
respectively? calculate the overhead cost per unit for each product using departamental rates and compare with the plantwide rate unit costs calculated in
requirement 2. What can you conclude from this outcome?