Answer:
Results are below.
Explanation:
<u>First, we need to calculate the predetermined overhead rate:</u>
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 765,000 / (7,000 + 6,200)
Predetermined manufacturing overhead rate= $57.95 per direct labor hour
<u>Now, we can allocate overhead to each product:</u>
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Product Y:
Allocated MOH= 57.95*7,000= $405,650
Product Z:
Allocated MOH= 57.95*6,200= $359,390
<u>Finally, the allocation rates based on ABC:</u>
Machining= 231,000 /11,000= $21 per machine hour
Machine setups= 180,000/300= $600 per setup
Production design= 94,000 / 2= $47,000 per product
