Problem:
Lake Prairie Company uses a plantwide overhead rate with machine hours as the allocation base. Next year, 120,000 units are expected to be produced taking 0.80 machine hours each.
Required:
Question: How much overhead will be assigned to each unit produced given the following estimated amounts?
Note: Please provide step by step solution.
| Estimated: |
Department 1 |
Department 2 |
| Manufacturing overhead costs |
$5,386,000 |
$2,457,000 |
| Direct hours |
500,000 DLH |
550,000 DLH |
| Machine hours |
340,000 MH |
280,000 MH |