Red Raider Company uses a plantwide overhead rate with direct labor hours as the allocation base. Next year, 400,000 units are expected to be produced requiring 0.9 direct-labor hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?

A) $19.00 per unit
B) $17.10 per unit
C) $139.00 per unit
D) $125.10 per unit
E) None of the choices

Question

Red Raider Company uses a plantwide overhead rate with direct labor hours as the allocation base. Next year, 400,000 units are expected to be produced requiring 0.9 direct-labor hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?

A) $19.00 per unit 
B) $17.10 per unit 
C) $139.00 per unit 
D) $125.10 per unit 
E) None of the choices

Quizplus · Accepted Answer

($2,530,000 + $2,752,000)/(168,000 + 110,000) DLH = $19 per DLH
$19.00 × 0.9 = $17.10 per unit

Red Raider Company Uses a Plantwide Overhead Rate with Direct