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43) Digital Technologies manufactures three types of computers
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# Question : 43) Digital Technologies manufactures three types of computers : 2147424

43) Digital Technologies manufactures three types of computers for a well-known national brand. The three types are: laptops, desktops, and tablets. Currently, Digital uses a single plant-wide overhead rate to allocate its \$1,667,250 of annual manufacturing overhead. Of this amount, \$562,000 is associated with laptops, \$492,000 is associated with desktops, and \$612,750 is associated with tablets. Digital is currently using a total of 22,150 machine hours: 7,500 for laptops, 8,200 for desktops, and 6,450 for tablets. Digital uses machine hours to allocate overhead costs.

Required:

a. Calculate the plant-wide manufacturing overhead rate.

b. Calculate the departmental overhead rate for each of the three departments listed.

c. Which product line(s) have been over costed by using the plant-wide manufacturing overhead rate? By how much per machine hour? Which product line(s) have been under costed by using the plant-wide manufacturing overhead rate? By how much per machine hour?

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