Digital Technologies Manufactures Three Types of Computers for a Well

question 4

Essay

Digital Technologies manufactures three types of computers for a well known national brand. The three types are: laptops, desktops, and tablets. Currently, Digital 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. Digital is currently using a total of 22,150 machine hours: 7,500 for laptops, 8,200 for desktops, and 6,450 for tablets. Digital 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?

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Definitions:

Lacunae

Small cavities in bone or cartilage tissue that house osteocytes or chondrocytes, which are cells responsible for maintaining bone and cartilage integrity.

Lamellae

Thin layers or plates, often found in bones, where they form concentric rings around blood vessels, or in the chloroplasts of plant cells.

Osteocytes

Osteocytes are mature bone cells encased in the bone matrix, playing a key role in bone maintenance and mineral homeostasis.

Osteoclasts

Cells that break down bone tissue, playing an essential role in bone remodeling and calcium homeostasis.