Freeze Frame, Inc.produces cameras that require three processes, A, B, and C, to complete.Digital camera model #789 is the best-selling of all the many types of cameras produced.Information related to the 550,000 units of digital camera model #789 produced annually is shown below.
$$\begin{array} { | l | r | }
\hline \text { Direct materials } & \$ 450,000 \
\hline \text { Direct labor } & \
\hline \text { Department A } ( 7,000 \text { DLL } \times \$ 21 \text { per DLH } ) & \$ 147,000 \
\hline \text { Department B } ( 25,000 \text { DLH } \times \$ 19 \text { per DLH) } & \$ 475,000 \
\hline \text { Department C } ( 10,000 \text { DLHH } \times \$ 26 \text { per DLH) } & \$ 260,000 \
\hline \text { Machine Hours } & \
\hline \text { Department } A & 42,000 \mathrm { MH } \
\hline \text { Department B } & 23,000 \mathrm { MH } \
\hline \text { Department C } & 38,000 \mathrm { MH } \
\hline
\end{array}$$ Freeze Frame's total expected overhead costs and related overhead data are shown below:
$$\begin{array} { | l | r | r | r | }
\hline & \text { Department A } & { \begin{array} { l }
\text { Departrnent } \
\text { B }
\end{array} } & { \begin{array} { l }
\text { Cepartrnent } \
\text { C }
\end{array} } \
\hline \text { Direct labor hours } & 90,000 \mathrm { DLH } & 75,000 \mathrm { DLH } & 42,000 \mathrm { DLH } \
\hline \text { Machine hours } & 67,500 \mathrm { MH } & 135,000 \mathrm { MH } & 53,200 \mathrm { MH } \
\hline \begin{array} { l }
\text { Manufacturing overhead } \
\text { costs }
\end{array} & \$ 540,000 & \$ 675,000 & \$ 399,000 \
\hline
\end{array}$$ a.Compute a departmental overhead rate for department A based on direct labor hours.
b.How much overhead is associated with model 789 from department A?
c.Compute a departmental overhead rate for department B based on direct labor hours.
d.How much overhead is associated with model 789 from department B?
e.Compute a departmental overhead rate for department C based on direct labor hours.
f.How much overhead is associated with model 789 from department C?
g What is the per unit cost of the 550,000 units of model 789?

Question

Freeze Frame, Inc.produces cameras that require three processes, A, B, and C, to complete.Digital camera model #789 is the best-selling of all the many types of cameras produced.Information related to the 550,000 units of digital camera model #789 produced annually is shown below.
 $$\begin{array} { | l | r | } 
\hline \text { Direct materials } & \$ 450,000 \
\hline \text { Direct labor } & \
\hline \text { Department A } ( 7,000 \text { DLL } \times \$ 21 \text { per DLH } ) & \$ 147,000 \
\hline \text { Department B } ( 25,000 \text { DLH } \times \$ 19 \text { per DLH) } & \$ 475,000 \
\hline \text { Department C } ( 10,000 \text { DLHH } \times \$ 26 \text { per DLH) } & \$ 260,000 \
\hline \text { Machine Hours } & \
\hline \text { Department } A & 42,000 \mathrm { MH } \
\hline \text { Department B } & 23,000 \mathrm { MH } \
\hline \text { Department C } & 38,000 \mathrm { MH } \
\hline
\end{array}$$ Freeze Frame's total expected overhead costs and related overhead data are shown below:
 $$\begin{array} { | l | r | r | r | } 
\hline & \text { Department A } &  { \begin{array} { l } 
\text { Departrnent } \
\text { B }
\end{array} } &  { \begin{array} { l } 
\text { Cepartrnent } \
\text { C }
\end{array} } \
\hline \text { Direct labor hours } & 90,000 \mathrm { DLH } & 75,000 \mathrm { DLH } & 42,000 \mathrm { DLH } \
\hline \text { Machine hours } & 67,500 \mathrm { MH } & 135,000 \mathrm { MH } & 53,200 \mathrm { MH } \
\hline \begin{array} { l } 
\text { Manufacturing overhead } \
\text { costs }
\end{array} & \$ 540,000 & \$ 675,000 & \$ 399,000 \
\hline
\end{array}$$ a.Compute a departmental overhead rate for department A based on direct labor hours.
b.How much overhead is associated with model 789 from department A?
c.Compute a departmental overhead rate for department B based on direct labor hours.
d.How much overhead is associated with model 789 from department B?
e.Compute a departmental overhead rate for department C based on direct labor hours.
f.How much overhead is associated with model 789 from department C?
g What is the per unit cost of the 550,000 units of model 789?

Quizplus · Accepted Answer

The Answer of Freeze Frame, Inc.produces cameras that require three processes, A, B, and C, to complete.Digital camera model #789 is the best-selling of all the many types of cameras produced.Information related to the 550,000 units of digital camera model #789 produced annually is shown below.
 $$\begin{array} { | l | r | } 
\hline \text { Direct materials } & \$ 450,000 \
\hline \text { Direct labor } & \
\hline \text { Department A } ( 7,000 \text { DLL } \times \$ 21 \text { per DLH } ) & \$ 147,000 \
\hline \text { Department B } ( 25,000 \text { DLH } \times \$ 19 \text { per DLH) } & \$ 475,000 \
\hline \text { Department C } ( 10,000 \text { DLHH } \times \$ 26 \text { per DLH) } & \$ 260,000 \
\hline \text { Machine Hours } & \
\hline \text { Department } A & 42,000 \mathrm { MH } \
\hline \text { Department B } & 23,000 \mathrm { MH } \
\hline \text { Department C } & 38,000 \mathrm { MH } \
\hline
\end{array}$$ Freeze Frame's total expected overhead costs and related overhead data are shown below:
 $$\begin{array} { | l | r | r | r | } 
\hline & \text { Department A } &  { \begin{array} { l } 
\text { Departrnent } \
\text { B }
\end{array} } &  { \begin{array} { l } 
\text { Cepartrnent } \
\text { C }
\end{array} } \
\hline \text { Direct labor hours } & 90,000 \mathrm { DLH } & 75,000 \mathrm { DLH } & 42,000 \mathrm { DLH } \
\hline \text { Machine hours } & 67,500 \mathrm { MH } & 135,000 \mathrm { MH } & 53,200 \mathrm { MH } \
\hline \begin{array} { l } 
\text { Manufacturing overhead } \
\text { costs }
\end{array} & \$ 540,000 & \$ 675,000 & \$ 399,000 \
\hline
\end{array}$$ a.Compute a departmental overhead rate for department A based on direct labor hours.
b.How much overhead is associated with model 789 from department A?
c.Compute a departmental overhead rate for department B based on direct labor hours.
d.How much overhead is associated with model 789 from department B?
e.Compute a departmental overhead rate for department C based on direct labor hours.
f.How much overhead is associated with model 789 from department C?
g What is the per unit cost of the 550,000 units of model 789?

Freeze Frame, Inc Freeze Frame's Total Expected Overhead Costs and Related Overhead Data