If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product W5 would be closest to:
A)$274.64 per unit
B)$626.24 per unit
C)$184.24 per unit
D)$123.12 per unit

Question

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $313,135 ÷ 4,000 DLHs = $78.28 per DLH (rounded)
Product W5: 8.0 DLHs × $78.28 per DLH = $626.24

If the Company Allocates All of Its Overhead Based on Direct