Wall Nuts, Inc. produces paneling that requires two processes, A and B, to complete. Oak is the best-selling of all the many types of paneling produced. Information related to the 40,000 units of oak paneling produced annually is shown in the following table:
|
Direct materials
|
$380,000
|
|
Direct labor
|
|
|
Department A (6,000 DLH x $25 per DLH)
|
$150,000
|
|
Department B (35,125 DLH x $16 per DLH)
|
$562,000
|
|
Machine Hours
|
|
|
Department A
|
24,000 MH
|
|
Department B
|
32,000 MH
|
Wall Nuts' total expected overhead costs and related overhead data are shown below.
|
Department A
|
Department B
|
|
Direct labor hours
|
67,000 DLH
|
170,000 DLH
|
|
Machine hours
|
100,000 MH
|
80,000 MH
|
|
Manufacturing overhead costs
|
$450,000
|
$600,000
|
1. Use the data for Wall Nuts, Inc. to compute departmental overhead rates based on machine hours in Department A and machine hours in Department B.
2. Use the data for Wall Nuts, Inc. to compute the dollar amount of overhead applied to each unit of oak paneling, assuming the company uses departmental overhead rates based on machine hours in Department A and machine hours in Department B.
3. Use the above data for Wall Nuts, Inc. to compute the total manufacturing cost per unit of oak paneling assuming the company uses departmental overhead rates based on machine hours in Department A and machine hours in Department B.