Harrington Company has two products: A and B. The annual production and sales of

Question

Harrington Company has two products: A and B. The annual production and sales of Product A is 1,750 units and of Product B is 1,150 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-hours per unit and Product B requires 0.7 direct labor-hours per unit. The predetermined overhead rate is $66.00 per direct labor-hour. What it the amount of overhead cost that will be allocated to each unit of Product B? (Round your answer to 2 decimal places.)

Explanation / Answer

Amount of overhead cost that will be allocated to each unit of Product B = Predetermined overhead rate*Direct labor-hours per unit = 66*0.7= $46.2

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