A company produces surgical equipment that goes through three departments, 1A1, 2B2, and 3C3, before they are complete. Expected costs and activities for the three departments are shown below. All departments have departmental overhead rates based on direct labor hours. Therefore, the overhead rate for each department is $5 per direct labor hour. Department 1A1Department 2B2Department 3C3Machine hours 15,000MH 25,000MH 20,000MHDirect labor hours 22,830DLH 10,650DLH 29,200DLHOverhead costs$114,150 $213,000 $73,000
Answer the following statement true (T) or false (F)
False
Dept. 1A1 = $114,150/22,830 DLH = $5.00 per DLH
Dept. 2B2 = $213,000/10,650 DLH = $20.00 per DLH
Dept. 3C3 = $73,000/29,200 DLH = $2.50 per DLH
Business
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