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 G1 would be closest to:
A)$412.02 per unit
B)$780.12 per unit
C)$720.63 per unit
D)$691.83 per unit

Question

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $1,386,814 ÷ 16,000 DLHs = $86.68 per DLH (rounded)
Product G1: 9.0 DLHs × $86.68 per DLH = $780.12

If the Company Allocates All of Its Overhead Based on Direct