Mega Manufacturing uses direct labor hours as its allocation base when applying overhead. Actual overhead cost...
Mega Manufacturing uses direct labor hours as its allocation base when applying overhead. Actual overhead cost was $750,000, actual Direct Labor cost was $240,000, and actual direct labor hours were 75,000. Estimated overhead for the period is $500,000, estimated direct labor cost is $650,000, and estimated direct labor hours are 50,000.
What is the estimated overhead allocation rate?
| A. |
$13.00 per Direct Labour hour |
|
| B. |
$15.00 per Direct Labour Hour |
|
| C. |
$10 per Direct Labour Hour |
|
| D. |
$3.20 per Direct Labour Hour |
Homework Answers
Estimated overhead allocation rate = Estimated overhead for the period / Estimated direct labor hours
= $500,000 / 50,000
= $10 per direct labor hour
The answer is Option C.
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Mega Manufacturing uses direct labor hours as its allocation
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