According to the scor model, supply chain management covers five broad areas including __________, which include identifying, de
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Answer:
Division A will allocate overhead at $0.30 for every $1 it spends on direct labor.
Division B will allocate overhead at $16 per machine hour.
We arrive at the answers above as follows:
<u>Division A</u>
Estimated overhead ($) 78,750
Estimated direct labor costs ($) 262,500
Estimated direct machine hours 26,250
Basis for overhead allocation Direct labor costs
Estimated overhead rate is calculated with the following formula:
<u>Division B</u>
Estimated overhead ($) 240,000
Estimated direct labor costs ($) 120,000
Estimated direct machine hours 15,000
Basis for overhead allocation Machine hours
Estimated overhead rate is calculated with the following formula: