Answer:
Total overhead= $1,290,000
Explanation:
Giving the following information:
Overhead:
Machining= $3,000,000
Assembling= $1,500,000.
Regular Supreme
Machine hours 10,000 30,000
Number of parts 90,000 160,000
First, we need to calculate the predetermined overhead rate per activity:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machining= 3,000,000/ (10,000 + 30,000)= $75 per machine hour
Assembling= 1,500,000/(90,000 + 160,000)= $6 per part
Now, we can allocate overhead to Regular:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Machining= 75*10,000= $750,000
Assembling= 6*90,000= $540,000
Total overhead= $1,290,000
