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Handy Display Company
manufactures display cases to be sold to retail stores. The cases come in three
sizes: large, medium, and small. Currently, Handy Display Company uses a single
plant-wide overhead rate to allocate its $3,357,800 of annual manufacturing
overhead. Of this amount, $1,000,000 is associated with the Large Case line,
$1,560,000 is associated with the Medium Case line, and $1,485,000 is
associated with the Small Case line. Handy Display Company is currently running
a total of 50,000 machine hours: 20,000 in the Large Case line, 24,000 in the
Medium Case line, and 15,000 in the Small Case line. Handy Display Company uses
machine hours as the cost driver for manufacturing overhead costs.
Requirement: Calculate the departmental overhead rate for
each of the three departments listed.
