103 Lake Erie Company uses a plantwide overhead... Lake Erie Company uses a plan
ID: 2591960 • Letter: 1
Question
103 Lake Erie Company uses a plantwide overhead... Lake Erie Company uses a plantwide overhead rate with machine hours as the allocation base. Next year, 617,333 units are expected to be produced taking 0.75 machine hours each. How much overhead will be assigned to each unit produced given the following estimated amounts? Estimated Department 1 Department 2 Manufacturing overhead costs Direct labor hours Machine hours $3,145, 500 $1,577,000 169,000 DLH 269,000 MH 269,000 DLH 194,000 MH Multiple Choice $10.78 per unit prev 39 of 50111 NextExplanation / Answer
Total manufacturing Overhead = Dept. 1 cost + Dept. 2 Cost
= 3,145,500 + 1,577,000
Total manufacturing Overhead = 4,722,500
Total machine hours = Dept. 1 Hours + Dept. 2 Hours
= 269,000 + 194,000
Total machine hours = 463,000
Manufacturing Overhead per machine hour = Total manufacturing Overhead / Total machine hours
= 4,722,500 / 463,000
Manufacturing Overhead per machine hour = $10.1998 per machine hour
Overhead per unit = Machine hours per unit * Manufacturing Overhead per machine hour
= 0.75 Machine hr. per unit * $10.1998 per machine hour
Overhead per unit = $7.649 per unit
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