Exhibit 20-2 Calumet Company sells slippers. The following information is available for Calumet's inventory for 2011:
Refer to Exhibit 20-2. Calculate Calumet's overhead cost for the year.

Question

Exhibit 20-2 Calumet Company sells slippers. The following information is available for Calumet's inventory for 2011:
 Refer to Exhibit 20-2. Calculate Calumet's overhead cost for the year.

Quizplus · Accepted Answer

Calumet's overhead cost is calculated by adding the indirect expenses (rent, utilities, etc.) and the overhead allocation (based on direct labor hours) for the year. Indirect expenses for the year are $900,000, and the overhead allocation is $180,000 (based on 150,000 direct labor hours at $1.20 per hour). Therefore, overhead cost for the year is $1,080,000.

Exhibit 20-2 Calumet Company Sells Slippers