Response to the following problem:
1. Plantwide Rates
Nabors Company produces two types of stereo units: deluxe and regular. For the most recent year, Nabors reports the following data:
|
Budgeted overhead
|
$180,000
|
|
|
Expected activity (in direct labor hours)
|
50,000
|
|
Actual activity (in direct labor hours)
|
51,000
|
|
Actual overhead
|
$200,000
|
|
Deluxe
|
Regular
|
|
Units produced
|
5,000
|
50,000
|
|
Prime costs
|
$40,000
|
$300,000
|
|
Direct labor hours
|
5,000
|
46,000
|
Required:
1. Calculate a predetermined overhead rate based on direct labor hours.
2. What is the applied overhead?
3. What is the under- or overapplied overhead?
4. Calculate the unit cost of each stereo unit.