Question

Spates, Inc., manufactures and sells two products: Product H2 and Product EO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below. Direct Total Labor- Direct Expected Hours Per Labor- Production Unit Hours 190 6.9 1,311 190 5. 9 1 , 121 2, 432 Product H2 Product 30 Total direct labor-hours The company's expected total manufacturing overhead is $270,968. If the company allocates all of its overhead based on direct labor-hours, the overhead assigned to each unit of Product H2 would be closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice 0 $126.48 per unit ) $96.36 per unit 0 $222.84 per unit 0 $768.80 per unit

Answer 1

WORKING NOTES:
	CALCUALTION OF MANUFACTURING OVERHEAD RECOVERY RATE
	Overhead Recovery Rate = Total manufacturing overhead / Total Direct Labor Hours
	Overhead Recovery Rate =
	Total Manufacturing overhead =	$2,70,968
	Divide By	"/" By
	Total Direct Labor Horus	$2,432
	Overhead recovery rate per hour	$111.42
SOLUTION:
	OVERHEAD ASSIGNED TO EACH UNIT OF PRODUCT H2
	Overhead for Prodcut H2 = Direct Labor Hours for one Unit X Overhead recovery rate per hour
	Overhead for Prodcut H2 = 6.9 Hours X $ 111.42
	Overhead for Prodcut H2 = $ 768.80 Per Unit
	Answer = Option 4 = $ 768.80 Per Unit