Bobke Technologies Manufactures Three Types of Computers for a Well

question 53

Essay

Bobke Technologies manufactures three types of computers for a well known national brand.The three types are: laptops,desktops,and tablets.Currently,Bobke uses a single plant-wide overhead rate to allocate its $1,667,250 of annual manufacturing overhead.Of this amount,$562,000 is associated with laptops,$492,000 is associated with desktops,and $612,750 is associated with tablets.Bobke is currently using a total of 22,150 machine hours: 7,500 for laptops,8,200 for desktops,and 6,450 for tablets.Bobke uses machine hours to allocate overhead costs.
Required:
a.Calculate the plant-wide manufacturing overhead rate.
b.Calculate the departmental overhead rate for each of the three departments listed.
c.Which product line(s)have been overcosted by using the plant-wide manufacturing overhead rate? By how much per machine hour? Which product line(s)have been undercosted by using the plant-wide manufacturing overhead rate? By how much per machine hour?

---

Definitions:

Safe Harbor Provisions

Legal provisions that provide protection from liability under certain conditions, often seen in regulatory contexts.

Internal Validity

The extent to which a study can establish a causal relationship between variables, free of confounding factors.

External Validity

The extent to which the results of a study can be generalized to other situations and to other people.

Construct Validity

The extent to which a test measures what it claims to be measuring; it's about the accuracy of the operationalization of the variables.