Question: Aragon makes handheld calculators in two models basic and professional and
Aragon makes handheld calculators in two models—basic and professional—and wants to refine its costing system by allocating overhead using Professional, total OH $644,000 departmental rates. The estimated $851,500 of manufacturing overhead has been divided into two cost pools: Assembly Department and Packaging Department. The following data have been compiled:
Compute the predetermined overhead allocation rates using machine hours as the allocation base for the Assembly Department and direct labor hours for the Packaging Department. How much overhead is allocated to the basic model? To the professional model?
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