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Plantwide Rates
Nabors Company produces two types of stereo units: deluxe and regular. For the most recent year, Nabors reports the following data:
Budgeted overhead
$180,000
Expected activity (in direct labor hours)
50,000
Actual activity (in direct labor hours)
51,000
Actual overhead
$200,000
Deluxe
Regular
Units produced
5,000
Prime costs
$40,000
$300,000
Direct labor hours
46,000
1. Calculate a predetermined overhead rate based on direct labor hours.
2. What is the applied overhead?
3. What is the under- or overapplied overhead?
4. Calculate the unit cost of each stereo unit.
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