The following information is available pertaining to the Production Division of

Question

The following information is available pertaining to the Production Division of Clarkson Enterprises: ? ? Assembly Dept. Finishing Dept. Total Overhead costs $7,500 $22,500 $30,000 Direct labor hours 7,500 2,500 10,000 Machine hours 2,500 7,500 10,000 ? ? ? ? Production information pertaining to Job 4X5: ? ? ? ? ? ? Assembly Dept. Finishing Dept. Total Prime costs $1,250 $0 $1,250 Direct labor hours 250 0 250 Machine hours 0 0 0 Units produced 500 0 500 ? What is the plantwide overhead rate based on direct labor hours? a. $1.50 b. $3.00 c. $1.00 d. $9.00

Explanation / Answer

Plantwide overhead rate = Total estimated overhead/Total estimated labour hour

= 30000/10000

Plantwide overhead rate = 3 per labour hour

so answer is b) $3.00

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