What are the total manufacturing overhead costs allocated to the Strollers for the current month?
A)$69,837.
B)$102,873.
C)$37,290.
D)$210,000.

Question

Quizplus · Accepted Answer

The total manufacturing overhead costs allocated to the Strollers for the current month can be calculated using the predetermined overhead rate and the actual amount of the allocation base used by the Strollers. The allocation base for the Strollers is direct labor hours, which is 8,000 hours for the current month. The predetermined overhead rate is calculated as follows:
Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Estimated total direct labor hours
= $840,000 ÷ 60,000 hours
= $14 per direct labor hour

The actual amount of direct labor hours used by the Strollers is 7,349 hours. Therefore, the total manufacturing overhead costs allocated to the Strollers for the current month can be calculated as:
Total manufacturing overhead costs allocated to Strollers = Actual direct labor hours used by Strollers x Predetermined overhead rate
= 7,349 hours x $14 per hour
= $102,886

Therefore, the best choice is B, which is closest to the calculated value of $102,886. Choice A is too low, choice C is significantly lower, and choice D is significantly higher than the calculated value.

What Are the Total Manufacturing Overhead Costs Allocated to the Strollers