Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Estimated costs and direct labor hours:
The total overhead= $300,000
Standard= 150,000 hours
Extreme= 50,000 hours
1) <u>Under traditional costing, overhead gets allocated using a single plantwide manufacturing overhead rate.</u>
To calculate the estimated manufacturing overhead rate we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 300,000/200,000= $1.5 per direct labor hour
Now, we can allocate overhead to each product:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Standard= 1.5*150,000= $225,000
Extreme= 1.5*50,000= $75,000
2) Machine:
Overhead= $200,000
Hours= 4,000 hours used on the Standard product and 1,000 hours used on the Extreme product.
Estimated manufacturing overhead rate= 200,000/5,000= $40 per hour
3)Set up:
Overhead= $100,000
Hours= 1,000 hours for the Standard and 1,500 hours for the Extreme.
Estimated manufacturing overhead rate= 100,000/2,500= $40
