Question

Spates, Inc., manufactures and sells two products: Product H2 and Product Eo. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Direct Total Labor Direct Expected Hours Per Labor- Production Unit Hours 100 6.0 600 100 5.0 500 1,100 Product H2 Product E Total direct labor-hours The company's expected total manufacturing overhead is $266,468. If the company allocates all of its overhead based on direct labor-hours, the overhead assigned to each unit of Product H2 would be closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Solution :

The Answer is (b) 1,453.44 per Unit

Working :

Overhead Allocated to Product H2    = (Total Estimated OH / Total Direct Labor Hours) * Labor Hours of H2

                             = ($ 266,468 / 1,100) * 600

                           = $ 145,344

OH per Unit of H2                         = Total Overhead Allocated / Total Estimated Units

                                                    = $ 145,344 / 100 Units

                                                     = $ 1,453.44 per Unit

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