Heritage Industries produces miniature models of farm equipment. These collectibles are in great demand. It takes two operations, molding and finishing, to complete the miniatures. Next year's expected activities are shown below.

-Heritage Industries uses departmental overhead rates and is planning on a $3 per direct labor hour overhead rate for the molding department. Compute the estimated manufacturing overhead cost for the molding department given the information above.

Question

Heritage Industries produces miniature models of farm equipment. These collectibles are in great demand. It takes two operations, molding and finishing, to complete the miniatures. Next year's expected activities are shown below.

-Heritage Industries uses departmental overhead rates and is planning on a $3 per direct labor hour overhead rate for the molding department. Compute the estimated manufacturing overhead cost for the molding department given the information above.

Quizplus · Accepted Answer

The estimated manufacturing overhead cost is calculated by multiplying the overhead rate by the total direct labor hours. If the overhead rate is $3 per direct labor hour, and assuming the total direct labor hours are 65,000 (since $195,000 / $3 = 65,000), the estimated manufacturing overhead cost for the molding department would be $195,000.

Heritage Industries Produces Miniature Models of Farm Equipment