Rain Maker Company Uses a Plantwide Overhead Rate with Direct-Labor

question 146

Multiple Choice

Rain Maker Company uses a plantwide overhead rate with direct-labor hours as the allocation base. Next year, 350,000 units are expected to be produced taking .80 direct-labor hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?
$\begin{array}{lcc}\text { Estimated: } & \text { Department } 1 & \text { Department 2 } \\\text { Manufacturing overhead costs } & \$ 2,730,000 & \$ 910,000 \\\text { Direct labor hours } & 168,000 \mathrm{DLH} & 112,000 \mathrm{DLH} \\\text { Machine hours } & 30,000 \mathrm{MH} & 7,000 \mathrm{MH}\end{array}$

• A) $13.00 per unit.
• B) $10.40 per unit.
• C) $16.25 per unit.
• D) $6.50 per unit.
• E) $8.13 per unit.

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