Exercise 26-1 (Algorithmic) O Question 1 of 7 Hint(s) | Check My Work eBook Sing

Question

Exercise 26-1 (Algorithmic) O Question 1 of 7 Hint(s) | Check My Work eBook Single Plantwide Factory Overhead Rate Eaton Metal Fabricators Inc.'s Fabrication Department incurred $98,000 of factory overhead cost in producing gears and sprockets. The two products consumed a total of 3,500 direct machine hours. Of that amount, sprockets consumed 1,800 direct machine hours. Determine the total amount of factory overhead that should be allocated to sprockets using machine hours as the allocation base. If required, round your answer to the nearest dollar. $ Hint(s) | Check My Work

Explanation / Answer

Total Factory Overhead Cost : $98,000

Total Direct machine hours = 3,500 hours.

therefore , Factory Overhead per direct machine hour = Total Factory Overhead Cost / Total Direct machine hours

= $98,000 /3,500 = $28

Total factory overhead to be allocated to Sprockets = $28 * 18,00 = $50,400

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