Exercise $4-6($Algo$)$ Computing departmental overhead rates LO P$2$

Hydro Sports budgets overhead cost of $$906,000$ for the year; of this amount, $$546,000$ is traceable to the Assembly department and

$$360,000$ is traceable to the Finishing department. The company manufactures two types of jet skis: standard and deluxe. Budgeted

direct labor hours for the standard model are $5$ in Assembly and $1$ in Finishing. Budgeted direct labor hours for the deluxe model are $8$

in Assembly and $2$ in Finishing. The company budgets production of $300$ units of the standard model and $300$ units of the deluxe

model for the year.

Compute each department's total number of budgeted direct labor hours for the year.

Compute departmental overhead rates for each department using direct labor hours for that department.

Compute overhead cost per unit for each model using departmental overhead rates. Actual direct labor hours for the standard

model are $5$ in Assembly and $1$ in Finishing. Actual direct labor hours for the deluxe model are $8$ in Assembly and $2$ in Finishing.

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