managerial accounting 457720

Wall Nuts, Inc. produces paneling which 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 below.

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.

Departments. 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

Use the data for Wall Nuts, Inc. to compute departmental overhead rates based on machine hours in Department A and machine hours in Department B.

$4.50 per MH in Dept A; $4.50 per MH in Dept B.

$7.50 per MH in Dept A; $7.50 per MH in Dept. B.

$4.50 per MH in Dept A; $7.50 per MH in Dept B.

$2.70 per MH in Dept A; $6.00 per MH in Dept B.

$0.60 per MH in Dept A; $0.80 per MH in Dept B.