Archid Inc.,a manufacturer of spare parts,has two production departments-Assembling and Packaging.The Assembling department is mechanized,while the Packaging department is labor-oriented.Estimated manufacturing overheads for the year 2015 were $15,000,000 for Assembling and $10,000,000 for Packaging.Calculate the department-wide allocation rates if the total estimated machine hours were 30,000 and labor hours were 20,000 for the year.
A)$250,$300
B)$500,$500
C)$300,$300
D)$450,$540

Question

Quizplus · Accepted Answer

The allocation rate for Assembling is $15,000,000 / 30,000 machine hours = $500 per machine hour. The allocation rate for Packaging is $10,000,000 / 20,000 labor hours = $500 per labor hour.