Figure 4-10 The Emmanuele Company has collected the following data for use in calculating product costs:
Activity Data: (expected and actual)
Departmental Data: (expected and actual)

- Refer to Figure 4-10.Emmanuele Company uses departmental overhead rates: Molding uses machine hours and Assembly uses labor hours.What is the unit product cost for brooms if departmental overhead rates are used?
A) $3.50
B) $8.50
C) $3.00
D) $1.40

Question

Figure 4-10 The Emmanuele Company has collected the following data for use in calculating product costs:
Activity Data: (expected and actual)
 Departmental Data: (expected and actual)

- Refer to Figure 4-10.Emmanuele Company uses departmental overhead rates: Molding uses machine hours and Assembly uses labor hours.What is the unit product cost for brooms if departmental overhead rates are used?
A) $3.50 
B) $8.50 
C) $3.00 
D) $1.40

Quizplus · Accepted Answer

The unit product cost for brooms is $3.50 when departmental overhead rates are used. This is because the molding department uses machine hours and the assembly department uses labor hours. The overhead rate for the molding department is $2.00 per machine hour and the overhead rate for the assembly department is $1.50 per labor hour. The total overhead cost for a broom is $3.50 ($2.00 + $1.50). The direct material cost for a broom is $2.00 and the direct labor cost for a broom is $3.00. The total unit product cost for a broom is $8.50 ($3.50 + $2.00 + $3.00).

Figure 4-10 the Emmanuele Company Has Collected the Following Data