Reference no: EM132537780

Wall Nuts, Inc. produces paneling that requires two processes, A and B, to complete. Oak is the best-selling of all the many types of paneling produced.

Information related to the 40,000 units of oak paneling produced annually is shown in the following table:

Direct materials      $380,000

Direct labor

?Department A (6,000 DLH x $25 per DLH) $150,000

Department B (35,125 DLH x $16 per DLH) $562,000

Machine Hours?Department A                  24,000 MH

Department B                                       32,000 MH

Wall Nuts' total expected overhead costs and related overhead data are shown below.

                                                            Department A                          Department B

Direct labor hours                         67,000 DLH                        170,000 DLH

Machine hours                           100,000 MH                           80,000 MH

Manufacturing overhead costs           $450,000                          $600,000

Question 1: Use the above data for Wall Nuts, Inc. to compute the total manufacturing cost per unit of oak paneling assuming the company uses departmental overhead rates based on machine hours in Department A and machine hours in Department B.

Option A. $18.20

Option B. $8.70

Option C. $27.30

Option D. $36.00

Option E. $21.95