Felton Quality Productions Company has provided the following information for the year 2012:
$$\begin{array} { l l }
\text { Actual manufacturing overhead costs incurred } & \$ 89,770 \
\text { Manufacturing overhead costs allocated to production } & \$ 95,200 \
\text { Actual direct materials cost } & \$ 224,000 \
\text { Actual direct labor cost } & \$ 93,750 \
\text { Actual direct labor hours } & 18,500 \text { direct labor hours } \
\text { Actual machine hours } & 56,000 \text { machine hours }
\end{array}$$
Based on the above information, what was Felton's allocation rate? (Hint: for this type of problem, the "trial and error" method may be used.)

Question

Felton Quality Productions Company has provided the following information for the year 2012:
$$\begin{array} { l l } 
\text { Actual manufacturing overhead costs incurred } & \$ 89,770 \
\text { Manufacturing overhead costs allocated to production } & \$ 95,200 \
\text { Actual direct materials cost } & \$ 224,000 \
\text { Actual direct labor cost } & \$ 93,750 \
\text { Actual direct labor hours } & 18,500 \text { direct labor hours } \
\text { Actual machine hours } & 56,000 \text { machine hours }
\end{array}$$
Based on the above information, what was Felton's allocation rate? (Hint: for this type of problem, the "trial and error" method may be used.)

Quizplus · Accepted Answer

The allocation rate is $1.70 per machine hour. This is calculated by dividing the actual manufacturing overhead costs incurred by the actual machine hours.

Felton Quality Productions Company Has Provided the Following Information for the Year