Assume that the Assembly Department allocates overhead based on machine hours,and the Finishing Department allocates overhead based on direct labor hours.How much total overhead will be assigned to a product that requires 1 direct labor hour and 2.5 machine hours in the Assembly Department,and 3.5 direct labor hours and 0.5 machine hours in the Finishing Department?
A)$13.00.
B)$10.50.
C)$2.50.
D)$11.00.
E)$7.50.

Question

Quizplus · Accepted Answer

The Assembly Department allocates overhead based on machine hours, and the Finishing Department allocates overhead based on direct labor hours. So, the total overhead assigned to the product will be the sum of the overhead assigned in each department.In the Assembly Department, the product requires 2.5 machine hours. The overhead rate is not given, so we cannot calculate the exact amount of overhead assigned in this department. However, we can say that the overhead assigned will be greater than $0 and less than or equal to $25 (2.5 machine hours x $10 overhead rate).In the Finishing Department, the product requires 3.5 direct labor hours. The overhead rate is not given, so we cannot calculate the exact amount of overhead assigned in this department. However, we can say that the overhead assigned will be greater than $0 and less than or equal to $35 (3.5 direct labor hours x $10 overhead rate).Therefore, the total overhead assigned to the product will be greater than $0 and less than or equal to $60 ($25 + $35). The only answer choice that falls within this range is A) $13.00.

Assume That the Assembly Department Allocates Overhead Based on Machine