Question

koehler makes handheld calculators in two model: basic and professional.koehler estimated $721,000 of manufacturing overhead and 515,000 machine hours for the year. the basic model actually consumed 230,000 machine hours, and the professional model consumed 285,000 machine hours. requirements are: 1. compute the predetermined overhead allocation rate using machine hours as the allocation base. 2. how much overhead is allocated to the basic model? to the professional model? select the formula, then enter the amounts to compute the predetermined overhead allocation rate.

Answer 1

Answer = 1)
CALCULATION OF THE PREDETERMOINED OVERHEAD RATE
Overhead Rate = Estimated manuacture Overhead / Machiene Hours
Overhead Rate =
Estimate Manufacture Overhead =	$           7,21,000
Divide By	"/" By
Machiene Hours	$           5,15,000
Overhead Rate per Machiene Hours	$                   1.40
Answer = 2)
Overhead is allocated to Basic Model = Machine Hours Used for Basic Model X Overhead Rate per machiene Hours
Overhead is allocated to Basic Model = 230,000 MH X $ 1.40 =	$           3,22,000
Answer = 3)
Overhead is allocated to Professional Model = Machine Hours Used for Professional Model X Overhead Rate per machiene Hours
Overhead is allocated to Professional Model =285,000 MH X $ 1.40 =	$           3,99,000