Asked by quatria downs` on Jul 06, 2024
Verified
If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product C5 would be closest to:
A) $693.44 per unit
B) $965.80 per unit
C) $424.71 per unit
D) $476.74 per unit
Overhead Assigned
The process of allocating indirect costs to specific cost objects, such as products, services, or departments.
Direct Labor-Hours
Direct labor-hours represent the total hours worked by employees directly involved in the manufacturing process, serving as a basis for allocating labor costs to products.
Traditional Costing
An accounting method that allocates manufacturing overhead based on the volume of a cost driver, such as the amount of labor or materials used.
- Ascertain the distribution of overhead expenses to products by means of standard costing methods.
Verified Answer
JR
jessica remorenkoJul 11, 2024
Final Answer :
A
Explanation :
Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $1,059,155 ÷ 16,800 DLHs = $63.04 per DLH (rounded)
Product C5: 11.0 DLHs × $63.04 per DLH = $693.44
= $1,059,155 ÷ 16,800 DLHs = $63.04 per DLH (rounded)
Product C5: 11.0 DLHs × $63.04 per DLH = $693.44
Learning Objectives
- Ascertain the distribution of overhead expenses to products by means of standard costing methods.