Sylvest,Inc. ,manufactures and sells two products: Product O3 and Product L8.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below: The company's expected total manufacturing overhead is $913,376. If the company allocates all of its overhead based on direct labor-hours,the overhead assigned to each unit of Product O3 would be closest to:
A)$548.01 per unit
B)$441.00 per unit
C)$133.92 per unit
D)$342.00 per unit

Question

Sylvest,Inc. ,manufactures and sells two products: Product O3 and Product L8.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below:  The company's expected total manufacturing overhead is $913,376. If the company allocates all of its overhead based on direct labor-hours,the overhead assigned to each unit of Product O3 would be closest to:
A)$548.01 per unit 
B)$441.00 per unit 
C)$133.92 per unit 
D)$342.00 per unit

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $913,376 ÷ 15,000 DLHs = $60.89 per DLH (rounded)
Product O3: 9.0 DLHs × $60.89 per DLH = $548.01