Randy Candy Company Produces Candy Sticks (Hooked and Straight) Total Manufacturing Overhead Costs Equal $400,000

Essay

Randy Candy Company produces candy sticks (hooked and straight). Both products pass through two producing departments. The hooked stick's production is much more labour-intensive than the straight stick. The straight stick is also more popular. The following data have been gathered for the two products: $$\begin{array}{l}\begin{array} { l r r } &\text { Product Data }\\& \text { Hooked } & \text { Straight } \\\text { Units produced per year } & 200,000 & 2,000,000 \\\text { Direct labour hours } & 10,000 & 40,000 \\\text { Machine hours } & 10,000 & 70,000\end{array}\end{array}$$ Total manufacturing overhead costs equal $400,000. Randy Candy applies manufacturing overhead based on direct labour hours.
A. Calculate the plantwide manufacturing overhead rate based on direct labour hours.
B. Using the plantwide manufacturing overhead rate, calculate the manufacturing overhead cost per unit for hooked sticks.
C. Using the plantwide manufacturing overhead rate, calculate the manufacturing overhead cost per unit for straight sticks.
D. Recalculate the plantwide manufacturing overhead rate assuming Randy Candy Company supplies manufacturing overhead based on machine hours.
E. Assuming the prime costs for hooked sticks is $0.47, calculate the total cost using the manufacturing overhead rate developed in part a.F. Assuming the prime costs for hooked sticks is $0.47, calculate the total cost using the manufacturing overhead rate developed in part D.