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APOLLO MANUFACTURING PRODUCES A BASIC CELLPHONE

APOLLO MANUFACTURING PRODUCES A BASIC CELLPHONE

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Author: Joyce Buda
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Apollo Manufacturing produces a basic cellphone as a contract manufacturer. Overhead is applied at a rate of $42 perdirect labor hour. The direct labor rate is $18 per hour. In March, there was no beginning or ending work in process, andthe assembly department produced 20,000 finished phones. The materials cost was $120,000, and there were 2,500direct labor hours worked during the month. Actual overhead spending was $103,400 during the month.Calculate the total cost of production in the month of March and the cost per unit for each phone produced. Determineif overhead was over applied or under applied and by what amount.Mega Manufacturing produces wooden chairs. The cutting department produces all of the componentparts and transfers the parts to the assembly department. The assembly department had no work inprocess at the beginning of the month and had two jobs started during the month. Since materials aretransferred in, all materials are charged to each job at the beginning of the job. The materials cost is$17.50 per chair. Assembly time is 20 minutes per chair and the direct labor rate is $15 per hour. Overheadis charged to a job only when a job is completed and ready to transfer to finished goods. The overhead isapplied on a per-chair basis at a rate of $6 per chair. Job No. 1 was for 1,000 chairs, and it was started andcompleted during the month. Job No. 2 was for 1,500 chairs, and it was 60% complete at month end.

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