Bishop Pty Ltd produces a range of products through several processes.Total overhead costs for process A are $200 000 and overhead is allocated to units of product on the basis of $5 of overhead for each hour of direct labour employed.If 4000 units of product D pass through process A,requiring 1500 direct labour hours,the overhead from process A to be applied to product D is:
A) $26 667
B) $13 333
C) $20 000
D) $7 500

Question

Quizplus · Accepted Answer

The overhead applied to product D is calculated by multiplying the direct labour hours by the overhead rate per hour: 1500 hours * $5/hour = $7,500.

Bishop Pty Ltd Produces a Range of Products Through Several