This is a very simple question, but we need to recognize it as simple. We simply need to divide the assembly costs by the number of direct labor hours. $300,000 ÷ 25,000 = $12.
This is the machining department's budgeted overhead cost divided by the assembly department's budgeted direct labor hours.
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This is not the correct answer. Please see the correct answer for a complete explanation. We have been unable to determine how to calculate this incorrect answer choice. If you have calculated it, please let us know how you did it so we can create a full explanation of why this answer choice is incorrect. Please send us an email at support@hockinternational.com. Include the full Question ID number and the actual incorrect answer choice -- not its letter, because that can change with every study session created. The Question ID number appears in the upper right corner of the ExamSuccess screen. Thank you in advance for helping us to make your HOCK study materials better.
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If Rochester Manufacturing decides not to allocate service costs to the production departments, the overhead allocated to each direct labor hour in the Assembly Department would be: