Question

X Company has two production departments, A and B. The following is budgeted information for all of its products in 2019, and actual information for one of them, Product X: All Products Product X $1,900,000 60,000 874 120,000 1,090 58,000 630 Department A Overhead Direct labor hours Machine hours Units produced Department B Overhead Direct labor hours Machine hours Units produced 223 $1,900,000 60,000 140,000 42,000 890 630 Using a single-driver allocation system, with machine hours as the driver, how much overhead was allocated to Product X [round overhead rate(s) to two decimal places]? Submit Answer Tries 0/3

Answer 1

Answer: $28.947.60 Total Overhead = Overhead of department A + Overhead of department B = $1,900,000 + $1,900.000 = $3,800,000 Total machine hours = Machine hours in department A + Machine hours in department B = 120,000 + 140,000 = 260,000 Estimated factory overhead cost Predetermined factory overhead rate = Estimated number of machine hours $3,800,000 260,000 = $14.61538.... = $14.62 Total machine hours used for product X= Machine hours in department A+ Machine hours in department B = 1.090 + 890 = 1,980 Amount of overhead allocated = 1,980 hours x $14.62 = $28.947.60