Homework Answers
A.
Predetermined overhead rate = Estimated total overhead / Estimated direct labor hours
Predetermined overhead rate = $60,480 / 288,000 = $0.21 per direct labor hour
| Type of product | Allocated cost |
| Seasonal | $25,410 (121,000*$0.21) |
| All-purpose | 35,070 (167,000*$0.21) |
| The most appropriate cost driver is | Direct labor hours |
B.
Predetermined overhead rate per direct labor hour = $75,180 / 179,000 = $0.42 per direct labor hour
| Type of product | Allocated cost |
| Seasonal | $5,040 (12,000*$0.42) |
| All-purpose | 70,140 (167,000*$0.42) |
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