Question

Harrington Company has two products: A and B. The annual production and sales of Product A is 1,750 units and of Product B is 1,150 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-hours per unit and Product B requires 0.7 direct labor-hours per unit. The predetermined overhead rate is $66.00 per direct labor-hour. What it the amount of overhead cost that will be allocated to each unit of Product B?

Answer 1

Answer:

$46.2

Explanation:

Data provided in the question

Annual production and the sales of product A = 1,750 units

Annual  production and the sales of product A = 1,150 units

Product A = 0.4 direct labor hours per unit

Product B = 0.7 direct labor hours per unit

Predetermined overhead rate = $66 per direct labor hour

So by considering the above information, the amount of overhead cost for product B is

= Predetermined overhead rate × direct labor hours per unit for product B

= $66 × 0.7

= $46.2