X Company uses a plantwide overhead allocation system with direct labor hours as
ID: 2378819 • Letter: X
Question
X Company uses a plantwide overhead allocation system with direct labor hours as the activity measure. The following is budgeted total cost and activity information for 2013:
-Direct Materials $346,500
-Direct Labor $367,500
-Direct Labor Hours 24,500
-Factory Overhead $558,000
The following information is taken from the job sheet for job A in 2013:
Total Direct Materials: $49,500
Total Direct Labor Hours: 750
Total Direct Labor: $82,500
Total Overhead: ????
How much overhead was allocated to job A?
Explanation / Answer
Per hour Overhead is ( 558000 / 24500 ) = 22.78
For 750 hours its 750 * 22.78 = $17,081.63
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