Total overhead of $235,000 is allocated according to the proportion of labour hours. Department A used 1830 hours, department B used 1635 hours, and department C used 1760 hours. What amount of overhead should be allocated to department C?

Question

Quizplus · Accepted Answer

The total hours used by all departments is 1830 + 1635 + 1760 = 5225 hours. The proportion of hours used by department C is 1760/5225. The overhead allocated to department C is (1760/5225) * $235,000 = $79,157.89.

Total Overhead of $235,000 Is Allocated According to the Proportion