Car Truck (a1) Altex Inc- manufactures two products- car wh.docx

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Car Truck (a1) Solution Calculation of Overhead Rate Car Truck No of wheels 40000 10000 Time 1 3 Total Labour Hours 40000 30000 40000+30000= 70000 Now Overhead Cost/ Labour Hours = 770000/70000 = $ 11 Overhead rate is $ 11 per direct labour hour .

Bildung

Car
Truck
(a1)
Altex Inc. manufactures two products: car wheels and truck wheels. To determine the
amount of overhead to assign to each product line, the controller, Robert Hermann, has
developed the following information.
Car Truck
Estimated wheels produced 40,000 10,000
Direct labor hours per wheel 1 3
Total estimated overhead costs for the two product lines are $770,000.
Solution
Calculation of Overhead Rate Car Truck No of wheels 40000 10000 Time 1 3 Total Labour
Hours 40000 30000 40000+30000= 70000 Now Overhead Cost/ Labour Hours = 770000/70000
= $ 11 Overhead rate is $ 11 per direct labour hour

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