angler industries produces a product which goes through two operations, assembly and finishing, before it is…

angler industries produces a product which goes through two operations, assembly and finishing, before it is ready to be shipped. next years expected costs and activities are shown below. \nassembly: direct labor - hours 150,000 dlh, machine - hours 350,000 mh, overhead costs $350,000 \nfinishing: direct labor - hours 145,000 dlh, machine - hours 78,750 mh, overhead costs $507,500 \nassume that the assembly department allocates overhead based on machine - hours, and the finishing department allocates overhead based on direct labor - hours. how much total overhead will be assigned to a product that requires 1 direct labor hour and 3.0 machine hours in the assembly department, and 3.6 direct labor hours and 0.5 machine hours in the finishing department? \nmultiple choice \n$15.60 \n$12.60 \n$3.00 \n$13.10 \n$9.10

angler industries produces a product which goes through two operations, assembly and finishing, before it is ready to be shipped. next years expected costs and activities are shown below. \nassembly: direct labor - hours 150,000 dlh, machine - hours 350,000 mh, overhead costs $350,000 \nfinishing: direct labor - hours 145,000 dlh, machine - hours 78,750 mh, overhead costs $507,500 \nassume that the assembly department allocates overhead based on machine - hours, and the finishing department allocates overhead based on direct labor - hours. how much total overhead will be assigned to a product that requires 1 direct labor hour and 3.0 machine hours in the assembly department, and 3.6 direct labor hours and 0.5 machine hours in the finishing department? \nmultiple choice \n$15.60 \n$12.60 \n$3.00 \n$13.10 \n$9.10

Answer

Explanation:

Step1: Calculate Assembly - Department overhead rate

The Assembly Department allocates overhead based on machine - hours. The total overhead cost in the Assembly Department is $350,000 and the total machine - hours are 350,000 MH. The overhead rate ($r_1$) is calculated as the total overhead cost divided by the total machine - hours. $r_1=\frac{350000}{350000}=1$ per machine - hour

Step2: Calculate Assembly - Department overhead assigned to the product

The product requires 3.0 machine - hours in the Assembly Department. The overhead assigned to the product in the Assembly Department ($O_1$) is the overhead rate times the number of machine - hours used by the product. $O_1 = 1\times3.0=3$

Step3: Calculate Finishing - Department overhead rate

The Finishing Department allocates overhead based on direct - labor hours. The total overhead cost in the Finishing Department is $507,500 and the total direct - labor hours are 145,000 DLH. The overhead rate ($r_2$) is calculated as the total overhead cost divided by the total direct - labor hours. $r_2=\frac{507500}{145000}=3.5$ per direct - labor hour

Step4: Calculate Finishing - Department overhead assigned to the product

The product requires 3.6 direct - labor hours in the Finishing Department. The overhead assigned to the product in the Finishing Department ($O_2$) is the overhead rate times the number of direct - labor hours used by the product. $O_2=3.5\times3.6 = 12.6$

Step5: Calculate total overhead assigned to the product

The total overhead assigned to the product ($O$) is the sum of the overhead assigned in the Assembly Department and the overhead assigned in the Finishing Department. $O=O_1 + O_2=3+12.6 = 15.6$

Answer:

$15.60$