Applied Overhead and Unit Overhead Cost: Plantwide Rates
Seco, Inc., produces two types of clothes dryers: deluxe andregular. Seco uses a plantwide rate based on direct labor hours toassign its overhead costs. The company has the following estimatedand actual data for the coming year:
| Estimated overhead | $2,288,000 |
| Expected activity | 52,000 |
| Actual activity (direct labor hours): | |
| Deluxe dryer | 12,000 |
| Regular dryer | 40,000 |
| Units produced: | |
| Deluxe dryer | 24,000 |
| Regular dryer | 200,000 |
Required:
1. Calculate the predetermined plantwideoverhead rate, using direct labor hours.
$ per hour
Calculate the applied overhead for each product, using directlabor hours.
| Applied overhead |
|
| Deluxe | $ |
| Regular | $ |
2. Calculate the overhead cost per unit foreach product. If required, round your answers to the nearestcent.
| Overhead Cost |
|
| Deluxe | $ per unit |
| Regular | $ per unit |
3. What if the deluxeproduct used 24,000 hours (to produce 24,000 units) instead of12,000 hours (total expected hours remain the same)? Calculate theeffect on the profitability of this product line if all 24,000units are sold.
Profits would - Select your answer -increasedecreaseItem 6 by$
