Answer:
The factory overhead allocated per unit of Blinks is b.$19.50
Explanation:
It is Important to note that Ramapo Company uses a single plantwide overhead rate to apply all factory overhead costs based on direct labor hours.
A plant Wide Overhead rate is a function of the Total Overheads of a Company divided by the Total Labor Hours in the Company
Total Overheads:
Fabrication Department $84,000
Assembly Department $72,000
Total $156,000
Total Labor Hours :
Fabrication Department 0
Assembly Department ( 1,000 × 4) + (2,000×2) 8,000
Total 8,000
Note : labor hours take place only in the Assembly Department
Plantwide overhead rate :
Plantwide overhead rate = Total Overheads / Total Labor Hours
= $156,000 / 8,000
= $ 19.50
Answer: $19.50
Explanation:
Given the following information about Ramapo company;
RAMAPO COMPANY :
Product Unit Direct-labor-hours
Blink 1000 4
Dink 2000 2
Prooduction is carried out in two departments ;
Fabrication(Machine-hours only)
Assembly department( Labor-hours only).
According to the question, THE COMPANY USES A SINGLE PLANT-WIDE OVERHEAD RATE TO APPLY TO ALL FACTORY OVERHEAD COST BASED OF DIRECT LABOR HOURS
PLANT-WIDE OVERHEAD =
Total factory overhead ÷ total factory direct labor hours
Total factory overhead:
Fabrication department overhead = $84,000
Assembly department overhead = $72,000
Total overhead = $156,000
Factory direct labor-hours :
Total Labor-hours= (unit × direct labor hour(Blink)) + unit × direct labor hour (Dink)
(1000 × 4) + (2000 × 2)= 8000
Plantwide overhead = Total overhead / total direct labor hour
Plantwide overhead cost per unit of Blink= $156,000 ÷ 8000 = $19.50
