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Red river farm machine makes a wide variety of products, all of which must be processed in the cutting and assembly departments. for the year 2010, red river budgeted total overhead of $993,000, of which $385,000 will be incurred in cutting and the remainder will be incurred in assembly. budgeted direct labor hours and machine hours are as follows:
cutting assemblybudgeted direct labor hours 27,000 3,000budgeted machine hours 2,100 65,800
two products made by red river are the RW22SKI and the SD45ROW. the following cost and production time information on these items has been gathered:
RW22SKI SD45ROW
direct material $ 34.85 $ 19.57direct labor rate in cutting $ 20.00 $ 20.00direct labor rate in assembly $ 8.00 $ 8.00direct labor hours in cutting 6.00 4.80direct labor hours in assembly 0.03 0.05machine hours in cutting 0.06 0.15machine hours in assembly 5.90 9.30
a. what is the plantwide predetermined Overhead rate based on direct labor hours and machine hours for the upcoming year?
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