Cardec, a leading manufacturer of car spare parts, divided its manufacturing process into two departments: 1) Production 2) Packing. Estimated overhead costs for the Production and Packing department amounted to $25,000,000 and $20,000,000, respectively. The company produces two types of parts: Part-1 and Part-2. The total estimated labor hours for the year 2015 were 40,000 and estimated machine hours were 50,000. The Production department was mechanized whereas the Packing department was labor oriented. Calculate departmental overhead allocation rates.
$$\begin{array} { c c c }
& \begin{array} { c }
\text { Production } \
\text { Machine hours }
\end{array} & \begin{array} { c }
\text { Packing } \
\text { Labor hours }
\end{array} \
\text { Part-1 } & 15,000 & 25,000 \
\text { Part-2 } & \underline{35,000} & \underline{15,000} \
& 50,000 & 40,000
\end{array}$$

Question

Cardec, a leading manufacturer of car spare parts, divided its manufacturing process into two departments: 1) Production 2) Packing. Estimated overhead costs for the Production and Packing department amounted to $25,000,000 and $20,000,000, respectively. The company produces two types of parts: Part-1 and Part-2. The total estimated labor hours for the year 2015 were 40,000 and estimated machine hours were 50,000. The Production department was mechanized whereas the Packing department was labor oriented. Calculate departmental overhead allocation rates.
 $$\begin{array} { c c c } 
& \begin{array} { c } 
\text { Production } \
\text { Machine hours }
\end{array} & \begin{array} { c } 
\text { Packing } \
\text { Labor hours }
\end{array} \
\text { Part-1 } & 15,000 & 25,000 \
\text { Part-2 } & \underline{35,000} & \underline{15,000} \
& 50,000 & 40,000
\end{array}$$

Quizplus · Accepted Answer

The Answer of Cardec, a leading manufacturer of car spare parts, divided its manufacturing process into two departments: 1) Production 2) Packing. Estimated overhead costs for the Production and Packing department amounted to $25,000,000 and $20,000,000, respectively. The company produces two types of parts: Part-1 and Part-2. The total estimated labor hours for the year 2015 were 40,000 and estimated machine hours were 50,000. The Production department was mechanized whereas the Packing department was labor oriented. Calculate departmental overhead allocation rates.
 $$\begin{array} { c c c } 
& \begin{array} { c } 
\text { Production } \
\text { Machine hours }
\end{array} & \begin{array} { c } 
\text { Packing } \
\text { Labor hours }
\end{array} \
\text { Part-1 } & 15,000 & 25,000 \
\text { Part-2 } & \underline{35,000} & \underline{15,000} \
& 50,000 & 40,000
\end{array}$$

Cardec, a Leading Manufacturer of Car Spare Parts, Divided Its