Herd, Inc., manufactures and sells two products: Product J5 and Product A9.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 $848,432. If the company allocates all of its overhead based on direct labor-hours, the overhead assigned to each unit of Product A9 would be closest to:
A)$202.24 per unit
B)$536.96 per unit
C)$222.72 per unit
D)$538.72 per unit

Question

Herd, Inc., manufactures and sells two products: Product J5 and Product A9.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 $848,432. If the company allocates all of its overhead based on direct labor-hours, the overhead assigned to each unit of Product A9 would be closest to:
A)$202.24 per unit 
B)$536.96 per unit 
C)$222.72 per unit 
D)$538.72 per unit

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $848,432 ÷ 12,600 DLHs = $67.34 per DLH (rounded)
Product A9: 8.0 DLHs × $67.34 per DLH = $538.72

Herd, Inc, Manufactures and Sells Two Products: Product J5 and Product