Western Company allocates $10.00 overhead to products based on the number of mac

Question

Western Company allocates $10.00 overhead to products based on the number of machine hours used. The company uses a plantwide overhead rate with machine hours as the allocation base. Given the amounts below, how many machine hours does the company expect in department 2?

98,000 MH

151,700 MH

27,000 MH

90,700 MH

37,000 MH

Western Company allocates $10.00 overhead to products based on the number of machine hours used. The company uses a plantwide overhead rate with machine hours as the allocation base. Given the amounts below, how many machine hours does the company expect in department 2?

Explanation / Answer

27000 MH

27000 MH

Department 1 Department2 Total Manufacturing overhead cost a 270,000 170,000 440,000 Overhead per machine hours b 10 Total no. of machine hours c=a/b 44,000 Machine hours in department 1 d 17,000 So, machine hours in department 2 c-d 27,000

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