A company allocates $7.50 overhead to each unit produced.The company uses a plantwide overhead rate with direct labor hours as the allocation base.Given the amounts below, how many direct labor hours does the company expect in department 2? $$\begin{array} { l c c }
\text { Estirnated: } & \text { Department 1 } & \text { Departrnent } 2 \
\text { Maruffacturing overhead costs } & \$ 74,358 & \$ 49,572 \
\text { Direct labor hours } & 6,610 \mathrm { DLH } & ? \mathrm { DLH } \
\text { Machinehours } & 700 \mathrm { MH } & \mathbf { 8 0 \mathrm { MH } }
\end{array}$$
A)9,914 DLH
B)6,612 DLH
C)3,109 DLH
D)7,454 DLH
E)16,254 DLH

Question

A company allocates $7.50 overhead to each unit produced.The company uses a plantwide overhead rate with direct labor hours as the allocation base.Given the amounts below, how many direct labor hours does the company expect in department 2? $$\begin{array} { l c c } 
\text { Estirnated: } & \text { Department 1 } & \text { Departrnent } 2 \
\text { Maruffacturing overhead costs } & \$ 74,358 & \$ 49,572 \
\text { Direct labor hours } & 6,610 \mathrm { DLH } & ? \mathrm { DLH } \
\text { Machinehours } & 700 \mathrm { MH } & \mathbf { 8 0 \mathrm { MH } }
\end{array}$$
A)9,914 DLH
B)6,612 DLH
C)3,109 DLH
D)7,454 DLH
E)16,254 DLH

Quizplus · Accepted Answer

The company allocates $7.50 overhead to each unit produced. So, the total overhead cost is $7.50 * (6,610 + ? DLH) = $74,358 + $49,572 = $123,930. Therefore, the number of direct labor hours in department 2 is $49,572 / $7.50 = 6,610 DLH.

A Company Allocates $7 A)9,914 DLH B)6,612 DLH C)3,109 DLH D)7,454 DLH E)16,254 DLH

A Company Allocates $7 A)9,914 DLH
B)6,612 DLH
C)3,109 DLH
D)7,454 DLH
E)16,254 DLH