Nabors Company produces two types of stereo units: deluxe and regular. For the most recent year,… 1 answer below »
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
50,000
Prime costs
$40,000
$300,000
Direct labor hours
5,000
46,000
Required:
(1) Calculate a predetermined plantwide 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.