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 X2 would be closest to:
A)$132.60 per unit
B)$1,837.85 per unit
C)$376.90 per unit
D)$461.40 per unit

Question

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $624,866 ÷ 1,700 DLHs = $367.57 per DLH (rounded)
Product X2: 5.0 DLHs × $367.57 per DLH = $1,837.85

If the Company Allocates All of Its Overhead Based on Direct