[hansthak]

Finding predetermined overhead rate question


XYZ Co. Makes two products -- Model F600 and Model F700. Model F700 offers advanced features and is sold for a higher price than Model F600. Management expects to manufacture 10,000 units of Model F600 and 5,000 units of Model F700 next year. The company's total manufacturing overhead for the year is expected to be $1,620,000. A unit of Model F600 requires 0.2 direct labour-hours and a unit of Model F700 requires 0.8 direct labour-hours.
A. The company currently applies manufacturing overhead to products using direct labour hours as the allocation base. What is the predetermined overhead rate
B. How much overhead cost would be applied to each product in total and per unit
C. Management is considering an activity based costing and would like to know what impact this would have on product costs. Preliminary analysis suggest that under activity based costing a total of $670,000 in machine related costs would be assigned to Model F600 and total of $820,000 would be assigned to Model F700. In addition, a total of $40,000 in other manufacturing costs would be applied to Model F600 and a total of $90,000 would be applied to Model F700. If this method is used, how much overhead cost would be applied to each product in total and per unit?
Find total overhead applied for F600 and F700 and overhead per unit for F600 and F700

[hansthak]

This is what I got for the answer:
1: $270 per direct labour hours
2: F600 total overhead cost $540,000 and $54 per unit
F700 $1,080,000 and $216 per unit
3: F600 total $710,000 and $71 per unit
F700 total $910,000 and $182 per unit

Could someone please check these answers if it is correct.. thanks

[hansthak]

Any suggestions on this questions