Answer:
The correct answer is B.
Explanation:
Giving the following information:
Total estimated overhead= $675,000
Total estimated direct labor hours= 300,000 hours
Regular widget production requires 2 direct labor hours for each unit.
The actual production of regular widgets for the period is 72,000 units.
First, we need to calculate the estimated overhead rate:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 675,000/300,000= $2.25 per direct labor hour
Now, we can allocate overhead to regular widgets:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Actual direct labor hours= 72,000 units*2hours= 144,000 hours
Allocated MOH= 2.25*144,000= $324,000
