Manufacturing overhead allocation problem


Manufacturing overhead is allocated to products based on the number of machine hours required. In a year when 20,000 machine hours were anticipated, costs were budgeted at $125,000. If a product requires 7,000 machine hours, how much manufacturing overhead will be allocated to this product?

A) $41,667

B) $43,750

C) $1,120

D) $50,000

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Accounting Basics: Manufacturing overhead allocation problem
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