Spates, Inc., manufactures and sells two products: Product H2 and Product EO. Da

Question

Spates, Inc., manufactures and sells two products: Product H2 and Product EO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below Direct Total Labor- Direct Expected Hours Per Labor- Production Unit Hours 1,976 1,716 3, 692 Product H2 Product EO Total direct labor-hours 260 7.6 260 6.6 The company's expected total manufacturing overhead is $274,468 If the company allocates all of its overhead based on direct labor-hours, the overhead assigned to each unit of Product H2 would be closest to (Round your intermediate calculations to 2 decimal places.) Multiple Choice $83.52 per unit $65.16 per unit $148.68 per unit

Explanation / Answer

Predetermined Overhead Rate = Total Manufacturing Overhead Cost / Total Direct Labor Hours

= $ 274,468 / 3,692 Direct Labor Hours

= $ 74.34127844 per Direct Labor Hour

Total Overhead Allocated to Product H2 =Predetermined Overhead Rate * Total Direct Labor Hours of H2

= $ 74.34127844 per Direct Labor Hour *1,976 Hours

= $ 146,898.3662

Overhead Allocated to each unit of Product H2 =$ 146,898.3662 / 260 Units

= $ 564.9937161

= $ 564.99

Hence the correct answer is $ 564.99 per unit

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.