Davidson Corporation manufactured 58,500 units during September. The following fixed overhead data relates to September:

What is the amount of fixed overhead allocated to production?

Question

Davidson Corporation manufactured 58,500 units during September. The following fixed overhead data relates to September:

What is the amount of fixed overhead allocated to production?

Quizplus · Accepted Answer

Fixed overhead cost per machine hour = $170,520 ÷ 3,480 = $49
Machine hours per unit = 3,480 ÷ 58,000 = 0.06
Fixed overhead cost per unit = $49 × 0.06 = $2.94
Fixed overhead allocated = 58,500 × $2.94 = $171,990

Davidson Corporation Manufactured 58,500 Units During September