Zimmerman Company manufactures two products, Board 12 and Case 165. Zimmerman's overhead costs consist of setting up machines, $2,400,000; machining, $5,400,000; and inspecting, $1,800,000. Information on the two products is: $\begin{array}{lrr}&\text { Board } 12& \text { Case } 165\
\text { Direct labor hours } & 15,000 & 25,000 \
\text { Machine setups } & 600 & 400 \
\text { Machine hours } & 24,000 & 26,000 \
\text { Inspections } & 800 & 700
\end{array}$ Overhead applied to Board 12 using traditional costing using direct labor hours is

Question

Quizplus · Accepted Answer

The total overhead costs are $9,600,000 ($2,400,000 + $5,400,000 + $1,800,000). Using traditional costing based on direct labor hours, the overhead rate is $192 per direct labor hour ($9,600,000 / 50,000 total direct labor hours). For Board 12, the overhead applied is $3,600,000 (15,000 direct labor hours x $192).

Zimmerman Company Manufactures Two Products, Board 12 and Case 165