Hot Air Equipment, LLC. manufactures burners and other products for hot air balloons. Hot Air has traditionally used a plant-wide overhead rate for allocating cost to its products. Because of the dramatic differences between its two production departments (Fabrication and Assembly) management has decided to investigate using departmental overhead rates for allocating overhead to its products. The following information has been accumulated with respect to budgeted departmental overhead, cost drivers and Hot Air's most popular Hercules Burner Budgeted overhead costs direct labor hours machine hours maintenance hours Fabrication $1,460,000 20,000 10,000 400 Assembly $726,000 30,000 2,000 100 Budgeted information for production of 1,200 Hercules Burners Direct Materials Direct Labor Direct labor hours Machine hours Fabrication Department $320,000 $ 57,600 1.800 1,000 Assembly Department $ 40,000 $ 75,000 3,000 150 Total $360,000 $132,600 4.800 1.150 2. 

Determine the product cost of one Hercules Burner.

 

 

 

 

Answer rating: 100% (QA)

1 Overhead Allocation Rates Calculation Fabrication Department Budgeted Overhead Costs 1460000 Cost ... View the full answer