Freeze Frame, Inc

question 75

Essay

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: Freeze Frame's total expected overhead costs and related overhead data are shown in the following table: a. Compute a departmental overhead rate for department A based on machine 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 machine 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?

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Definitions:

Merchandise

Goods that are purchased for resale to customers in the normal course of business operations.

Inventory Shrinkage

The loss of products between purchase from suppliers and sale to customers, often due to theft, damage, or clerical errors.

Operating Expense

Costs associated with the day-to-day operation of a business, including rent, utilities, and salaries.

Physical Count

The process of counting the actual inventory on hand to ensure accuracy in inventory records.