Answer Happy

Departmental Overhead Rates
Lansing, Inc., provided the following data for its two producingdepartments:
Machine hours are used to assign the overhead of the MoldingDepartment, and direct labor hours are used to assign the overheadof the Polishing Department. There are 20,000 units of Form Aproduced and sold and 50,000 of Form B.
Required:
1. Calculate the overhead rates for eachdepartment.
2. Using departmental rates, assignoverhead to the two products and calculate the overhead cost perunit. Round your answers to the nearestcent.
How does this compare with the plantwide rate unit cost, usingdirect labor hours?Relative to the plantwide rate, the cost
decreasedincreasedremained the same
for Form A and
decreasedincreasedremained the same
for Form B.
3. Whatif the machine hours in Molding were 1,200 forForm A and 3,800 for Form B and the direct labor hours used inPolishing were 5,000 and 15,000, respectively? Calculate theoverhead cost per unit for each product using departmentalrates. Round your answers to the nearestcent.
Compare with the plantwide rate unit costs calculated inRequirement 2. What can you conclude from this outcome?
Relative to the plantwide rate, the cost
decreasedincreasedremained the same
for Form A and
decreasedincreasedremained the same
for Form B.