Stealth,Inc.produces two types of drones,rotary and fixed wing.Stealth estimated $1,210,000 of manufacturing overhead,and 55,000 machine hours for the year.The allocation base for overhead costs is machine hours.The rotary model actually consumed 26,000 machine hours,and the fixed wing type consumed 29,000 machine hours.How much overhead is allocated to the rotary model?
A)$572,000
B)$638,000
C)$260,000
D)$212,667

Question

Quizplus · Accepted Answer

The overhead rate is calculated as $1,210,000 / 55,000 machine hours = $22 per machine hour. The rotary model consumed 26,000 machine hours, so the overhead allocated is 26,000 hours * $22/hour = $572,000.