When your products and/or services require the use of differentresources in different departments, you have to use multiplePOHRs...one for each department involved. Otherwise, a single,factory-wide POHR may not capture the correct information.

For example, when one product requires more machine time andless labor, and another product requires less machine time and morelabor, you have to charge the overhead cost in each department(machining, and hand-assembly) using the appropriate cost driver(machine time or labor time, as the case is).

Let's try one exercise: A camera passes through threedepartments, P, Q, and R, to complete its production. Informationrelated to the 100,000 units of a particular model C2100, producedannually, is shown below.

Actual Costs Direct materials $450,000

Direct labor (DLH: direct labor hours)

Department P (7,000 DLH × $21 per DLH) $147,000

Department Q (25,000 DLH × $19 per DLH) $475,000

Department R (10,000 DLH × $26 per DLH) $260,000

Machine Hours

Department P 42,000 MH

Department Q 23,000 MH

Department R 38,000MH

Total estimated overhead costs and related overhead data areshown below. Departments P and Q are more machine-intensive whileDepartment R is more labor-intensive. Overhead cost in eachdepartment is allocated to production according to the moredominant resource being used in that department.

	Department P	Deparment Q	Department R
Total Direct labor hours	9000 DLH	7500 DLH	42000 DLH
Total Machine hours	67500 MH	135000 MH	5320 MH
Total Manufacturing overhead costs	$540,000	$675,000	$399,000

1. What is the overhead allocation rate for each department?

2. How much overhead cost will be allocated to the 100,000 unitsof C2100 in each department?

3. What is the overhead cost allocated to each unit of C2100based on all of the above data?

4. What is the per unit product cost of C2100? 301 words