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Cat Boards is a local company that produces standard and specialty snowboards. Sebastian, the founder...

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Accounting

Cat Boards is a local company that produces standard and specialty snowboards. Sebastian, the founder and owner of Cat Boards, has designed the production process around three main stages; planking (where layers of plastic, fiberglass, and resin are layered around a wooden frame), cutting (where the board is cut to specs), and pressing (where the entire assembly is inserted in a press to harden into the desired shape). Currently Cat Boards is using a plant-wide overhead rate based on direct labor hours to allocate overhead. But, management feels that this approach distorts production costs and has asked you for help. The company currently produces 600 standard boards and 200 specialty boards. A standard board takes 2 labor hours while a specialty board takes 3 labor hours

Table 1

Planking

Cutting

Pressing

Direct Labor Hours

1,800

1,500

1,200

Machine Hours

300

600

1,200

Overhead Costs

$20,250

$17,625

$14,772

When using a plant-wide overhead rate based on direct labor hours, what is the cost per standard board for overhead?

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