Cardec Inc.,a leading manufacturer of car spare parts,divided its manufacturing process into two departments-Production and Packing.The estimated overhead cost for the Production and Packing departments 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 is mechanized whereas the Packing department is labor-oriented.Calculate departmental overhead allocation rates.

Question

Quizplus · Accepted Answer

The Answer of Cardec Inc.,a leading manufacturer of car spare parts,divided its manufacturing process into two departments-Production and Packing.The estimated overhead cost for the Production and Packing departments 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 is mechanized whereas the Packing department is labor-oriented.Calculate departmental overhead allocation rates.