Assume that the Assembly Department allocates overhead based on machine hours, and the Finishing Department allocates overhead b
ased on direct labor hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and 4.2 machine hours in the Assembly Department, and 5.0 direct labor hours and 0.4 machine hours in the Finishing Department?
1 answer:
Answer:
$9.2 0
Explanation:
The calculation of the Finishing Department is shown below:-
Plant - wide overhead rate = Total overhead ÷ Total machine hour
= ($470,000 + $737,900) ÷ ($470,000 + 133,950)
Plant wide overhead rate = $2 per machine hour
Machine hour for product = 4.2 + 0.4
= $4.6 machine hour
Applied overhead = Machine hour for product × Plant wide overhead rate
= $4.6 × $2
= $9.2 0
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