Answer:
Instructions are below.
Explanation:
Giving the following information:
Schell has a total of $39,060 in overhead.
Direct labor hours:
Standard= 400
Deluxe= 200
Machine hours:
Standard= 4,150
Deluxe= 3,000
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
1) Direct labor hours as allocation rate
Estimated manufacturing overhead rate= 39,060/600= $65.1 per direct labor hour
Now, we can allocate to each product line:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Standard= 65.1*400= $26,040
Deluxe= 65.1*200= $13,020
2) Machine hour as allocation rate:
Estimated manufacturing overhead rate= 39,060/7,150= $5.46 per machine hour
Now, we can allocate to each product line:
Standard= 5.46* 4,150= $22,659
Deluxe= 5.46*3,000= $16,380
