Lake Prairie Company Uses a Plantwide Overhead Rate with Machine

question 19

Multiple Choice

Lake Prairie Company uses a plantwide overhead rate with machine hours as the allocation base.Next year, 500,000 units are expected to be produced taking .75 machine hours each.How much overhead will be assigned to each unit produced given the following estimated amounts? $$\begin{array} { l c r } \text { Estimated: } & \text { Department 1 } & \text { Departnent } 2 \\\text { Marufacturing overhead costs } & \$ 3,107,500 & \$ 1,520,000 \\\text { Direct labor hours } & 150,000 D L H & 200,000 \mathrm { DLH } \\\text { Machine hours } & 200,000 \mathrm { MH } & 175,000 \mathrm { MH }\end{array}$$

• A)$12.34 per unit
• B)$7.77 per unit
• C)$9.25 per unit
• D)$15.20 per unit
• E)$10.36 per unit

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