Scoresby Co.uses 6 machine hours and 2 direct labor hours to produce Product X.It uses 8 machine hours and 16 direct labor hours to produce Product Y.Scoresby's Assembly and Finishing departments have factory overhead rates of $240 per machine hour and $160 per direct labor hour,respectively.How much overhead cost will be charged to the two products?
A) Product X = $3,200; Product Y = $9,600
B) Product X = $800; Product Y = $800
C) Product X = $1,760; Product Y = $4,480
D) Product X = $1,440; Product Y = $2,560

Question

Quizplus · Accepted Answer

To calculate the overhead cost charged to each product, we need to multiply the number of machine hours and direct labor hours used by their respective overhead rates and then add the results.

For Product X:
Overhead cost = (6 machine hours x $240/machine hour) + (2 direct labor hours x $160/direct labor hour)
Overhead cost = $1,440 + $320
Overhead cost = $1,760

For Product Y:
Overhead cost = (8 machine hours x $240/machine hour) + (16 direct labor hours x $160/direct labor hour)
Overhead cost = $1,920 + $3,560
Overhead cost = $4,480

Therefore, the correct answer is choice C.