Question

Alanzary Co. has the following estimated 2010 information for its two departments: Production and Assembly.
The production department is highly automated, and the assembly department is highly labor intensive. Product N, made by the company, requires the following quantities of machine and direct labor hours in each department.
Required:
(a) Assume that Alanzary Co. chooses to use direct labor hours to apply all overhead costs to products. What is the predetermined overhead rate for 2010? How much overhead would be assigned to each unit of Product N in 2010? (Round all calculations to the nearest penny.)
(b) Assume that Alanzary Co. chooses to use machine hours to apply all overhead costs to products. What is the predetermined overhead rate for 2010? How much overhead would be assigned to each unit of Product N in 2010? (Round all calculations to the nearest penny.)
(c) If Alanzary Co. decides to use the most appropriate base in each department to apply overhead to products, what would be the predetermined overhead rate in each department? How much overhead would be assigned to each unit of Product N in 2010? (Round all calculations to the nearest penny.)
(d) Why do the overhead amounts applied to Product N differ among parts (a), (b), and (c)?


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  • CreatedMarch 27, 2015
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