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MC.18-060The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments—Fabrication and Assembly. Data for the products and departments are listed below.ProductNumber ofunitsLabor hoursper unitMachine hoursper unitRings1,00046Dings2,00039All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $90,000. All of the labor hours take place in the Assembly Department, which has an estimated total overhead of $105,000.The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours.What is the Assembly Department overhead rate per labor hour?a.$19.50b.$3.75c.$4.38d.$10.50

Question
 MC.18-060
The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments—Fabrication and Assembly. Data for the products and departments are listed below.

Product Number of
units
Labor hours
per unit
Machine hours
per unit
Rings 1,000 4 6
Dings 2,000 3 9

All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $90,000. All of the labor hours take place in the Assembly Department, which has an estimated total overhead of $105,000.

The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours.

What is the Assembly Department overhead rate per labor hour?
a.$19.50
b.$3.75
c.$4.38
d.$10.50
check_circleAnswer
Step 1

Department overhead rate: The rate of direct expenses and indirect expenses allocated to every department in the process of production is referred to as department overhead rate.

Formula for departmental overhead rate:

 

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Step 2

Compute assembly departmental ove...

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