Exercise 3-15 Plantwide vs. departmental OH rates Roddickton Manufacturing

Exercise 3-15
Plantwide vs. departmental OH rates

Roddickton Manufacturing Co. has gathered the following information to develop predetermined OH rates for 2013. The company produces a wide variety of
energy-saving products that are processed through two departments Assembly (automated) and Finishing (labor intensive).

Budgeted total overhead: $600400 in Assembly and $199600 in Finishing

Budgeted total direct labor hours: 10000 in Assembly and 40000 in Finishing

Budgeted total machine hours: 76000 in Assembly and 4000 in Finishing

a. Compute a plantwide predetermined OH rate using direct labor hours.
$ per DLH

b. Compute a plantwide predetermined OH rate using machine hours.
$ per MH

c. Compute departmental predetermined OH rates using machine hours for Assembly and direct labor hours for Finishing. Round your answers to
the nearest cent.

d. Determine the amount of overhead that would be assigned to a product that required five machine hours in Assembly and one direct labor hour
in Finishing using the answers developed in (a) (b) and (c). Round your answers to the nearest cent.