Bond Company uses a plantwide overhead rate with direct labor hours as the allocation base. Use the following information to solve for the amount of direct labor hours estimated per unit of product G2.
A) 1.75 DLH per unit of G2.
B) 6.14 DLH per unit of G2.
C) 9.3 DLH per unit of G2.
D) 0.66 DLH per unit of G2.
E) 11.25 DLH per unit of G2.

Question

Bond Company uses a plantwide overhead rate with direct labor hours as the allocation base. Use the following information to solve for the amount of direct labor hours estimated per unit of product G2. 
A) 1.75 DLH per unit of G2. 
B) 6.14 DLH per unit of G2. 
C) 9.3 DLH per unit of G2. 
D) 0.66 DLH per unit of G2. 
E) 11.25 DLH per unit of G2.

Quizplus · Accepted Answer

Total cost per unit of G2:
$22 = DM + DL + OH
$22 = $7 + $4.25 + X
X = $10.75 overhead per unit of G2
Plantwide overhead rate: $787,500/450,000 DLH = $1.75 per DLH
DLH per unit of G2:
$10.75/$1.75 = 6.14 DLH per unit of G2

Bond Company Uses a Plantwide Overhead Rate with Direct Labor