Asked by Sandy Babbie on Jul 11, 2024
Verified
Slosh,Inc.produces washing machines that require two processes,assembling and finishing,to complete.The company's bestselling machine is the commercial washer.Information related to the 500 commercial washers produced annually is shown below.
Slosh's total expected overhead costs and related overhead data are shown below.The company uses departmental overhead rates based on direct labor hours in the Assembling Department and machine hours in the Finishing Department.
Determine the total product cost of this product line and each individual commercial washer.
Departmental Overhead Rates
Overhead rates calculated for specific departments within a company, allowing for more accurate assignment of overhead costs to products.
Direct Labor Hours
The total hours worked by employees directly involved in the production process.
Machine Hours
A measure of the total time that a machine is operated, used in calculating manufacturing costs and allocating expenses.
- Absorb and apply the theory behind departmental overhead rates.
- Analyze the entire cost of production and the cost for each unit for certain product lines.
Verified Answer
$80 per DLH x 1,000 DLH = $80,000 for commercial washer product line
Finishing Dept.overhead: $60,000/8,000 MH = $7.50 per MH
$7.50 per MH x 400 MH = $3,000 for commercial washer product line
Learning Objectives
- Absorb and apply the theory behind departmental overhead rates.
- Analyze the entire cost of production and the cost for each unit for certain product lines.
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