Greene Company uses a plantwide overhead rate with direct-labor hours as the all

Question

Greene Company uses a plantwide overhead rate with direct-labor hours as the allocation base. Use the following information to solve for the amount of direct-labor hours estimated per unit of product G2.

direct material cost per unit of G2 $7
total estimated manufacturing overhead $795,000
total cost per unit of G2 $20
total estimated direct-labor hours 530,000
direct labor cost per unit of G2 $3.70


1.5 DLH per unit of G2.
6.2 DLH per unit of G2.
9.3 DLH per unit of G2.
.66 DLH per unit of G2.
14.09 DLH per unit of G2.

Explanation / Answer

total cost per unit = DM per unit + DL per unit + OH per unit 20 = 7 + 3.70 + OH per unit OH per unit = 9.30 OH rate = 795,000/530,000 = $1.50 per DL hour 9.30 per unit/1.50 per DL hour = $6.20 DL hour per unit Answer: 6.2 DLH per unit of G2

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