Sara Company produces two types of clothes dryers: deluxe and regular. Seco uses a plantwide...
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Accounting
Sara Company produces two types of clothes dryers: deluxe and regular. Seco uses a plantwide rate based on direct labour hours to assign its overhead costs. The company has the following estimated and actual data for the coming year:
Estimated overhead
$2,000,000
Expected activity (Direct Labour hours)
80,000
Actual activity (direct labour hours):
Deluxe dryer
25,000
Regular dryer
40,000
Units produced:
Deluxe dryer
20,000
Regular dryer
200,000
1. Calculate the predetermined plantwide overhead rate and the applied overhead for each product, using direct labour hours.
2. Calculate the overhead cost per unit for each product.
Write formula wherever required. Provide all the working out, do not just write the final answers.
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