A Company Produces Heating Elements Which Go Through Two Operations

question 67

True/False

A company produces heating elements which go through two operations, casting and assembling, before they are complete. Expected costs and activities for the two departments are shown below. Given this information, the departmental overhead rate for the assembling department based on direct labor hours is $5 per direct labor hour.
$$\begin{array} { l c c } & \text { Casting } & \text { Assembling } \\\text { Direct labor hours } & 1,875 \mathrm { DLH } & 7,500 \mathrm { DLH } \\\text { Machine hours } & 12,500 \mathrm { MH } & 3,750 \mathrm { MH } \\\text { Overhead costs } & \$ 75,000 & \$ 37,500\end{array}$$

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Definitions:

Customization

The process of modifying a product or service to meet the specific needs or preferences of an individual customer.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale.

Operating Expense

Expenses incurred during the process of running a business that are not directly tied to producing goods or services.