The Overman Company manufactures products in two departments: Mixing and Packagi

Question

The Overman Company manufactures products in two departments: Mixing and Packaging. The company allocates manufacturing overhead using a single plantwide rate with direct labor hours as the allocation base. Estimated overhead costs for the year are $836,000, and estimated direct labor hours are 380,000. In October, the company incurred 60,000 direct labor hours. Read the requirements Requirement 1. Compute the predetermined overhead allocation rate. Round to two decimal places Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate Predetermined OH allocation rate

Explanation / Answer

1. Predetermined OH allocation rate = Estimated overhead costs / Estimated qty of the allocation base = $836,000 / 380,000 = $2.20

2. Allocated mfg. overhead costs = Predetermined OH allocation rate x Actual qty of the allocation base used = $2.20 x 60,000 = $132,000

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

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