Nikos Import- Export makes handheld calculators in two models basic and professi

Question

Nikos Import- Export makes handheld calculators in two models basic and professional.

Niko estimated $1,053,000 of manufacturing overhead and 585,000 machine hours for the year. The basic model actually consumed 160,000 machine hours and the professional model consumed 425,000 machine hours

Requirements

1.Compute the predetermined overhead allocation rate using machine hours as the allocation base.

Select the? formula, and then enter the amounts to compute the predetermined overhead? (OH) allocation rate. ?(Enter your answer to the nearest? cent.)

2.How much overhead is allocated to the basic? model? To the professional? model?

Explanation / Answer

1) Predetermine overhead rate = Estimated overhead/Estimated machine hour

= 1053000/585000

Predetermine overhead rate = 1.80 per machine hour

2) Overhead allocated to the basic model = 160000*1.8 = 288000

Overhead allocated to professional model = 425000*1.8 = 765000

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