Problem 4-25 Frameworks Artisans creates hand painted picture frames. The frames are cast from resin in an automated process. Once the casting is done, talented artisans hand paint one of fifteen designs on each frame. In the final assembly process, a worker inserts the glass pane and attaches the backing to the frame. Frameworks' budget for the current year, along with the production requirements for two of the frames it produces, are as follows Department Painting Assembly 12,900 878 Casting Direct labor hours Machine hours Manufacturing overhead 62,600 28,400 S254,000 $276,000 $53,000 cost Seasons of Fun Frame Department CastingPainting Assembly Direct labor hours Machine hours 0.5 0.05 Birth Frame Department Casting Painting Assembly Direct labor hours Machine hours 0.2 0.05 Your answer is correct. Assume that Frameworks Artisans uses a single predetermined overhead application rate based on direct labor hours. Calculate the rate for the current year. (Round overhead rate to 2 decimal places, e.g. 3.54.) Predetermined overhead rate 7.72/direct labor hour Frameworks Artisans' accountant has been taking a course in managerial accounting and has just learned that overhead should be applied using a causal base. She believes that direct labor hours may not be the best application base for the company and wants to explore the use of machine hours instead. Calculate the predetermined overhead application rate for the year using machine hours as the base. Using this rate, calculate the amount of overhead applied to a Seasons of Fun frame and a Birth Announcement frame. (Round overhead rates to 2 decimal places, e.g. 3.54.) direct labor hour Seasons of Fun Birth Announcement Overhead per frame Your answer is incorrect. Try again. The accountant has attended a few more classes and now wants to explore the use of departmental predetermined overhead rates. She has decided that machine hours is the best overhead application base for the casting department and direct labor hours is the best base for the painting and assembly departments. Using the departmental overhead application rates the accountant has decided on, calculate the amount of overhead applied to a Seasons of Fun frame and a Birth Announcement frame. (Round overhead rates to 2 decimal places, e.g. 3.54.) Scasons of Fun Birth Announcement Total overhead per frame Your answer is correct. Compare the levels of overhead applied to a Seasons of Fun frame and a Birth A t frame under the three different overhead application methods. Which method is best? artmental overhead rates