Freeze Frame, Inc A Compute a Departmental Overhead Rate for Department a Based

question 193

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 below:

$$\begin{array} { | l | l | l | l | } \hline & \text { Department A } & \text { Department B } & \text { Department C } \\\hline \text { Direct labor hours } & 90,000 \mathrm { DLH } & 75,000 \mathrm { DLH } & 42,000 \mathrm { DLH } \\\hline \text { Machine hours } & 67,500 \mathrm { MH } & 135,000 \mathrm { MH } & 53,200 \mathrm { MH } \\\hline \text { Manufacturing overhead costs } & \$ 540,000 & \$ 675,000 & \$ 399,000 \\\hline\end{array}$$

a. Compute a departmental overhead rate for department A based on direct labor 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 direct labor 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:

Accounts Receivable

Receivables from clients to a corporation for products or services rendered but payment is still due.

Financial Lecture

An educational session focusing on topics related to finance, including investment, money management, and economic principles.

Accounts Payable

Obligations or debts a company owes to its suppliers or vendors for goods or services received that haven't yet been paid for.

Calendar Year

The period of time from January 1 to December 31 in the Gregorian calendar, used as a standard for financial and business reporting.