dane company budgets total overhead cost of $7,200,000. the company allocates overhead cost based on 100,000…
dane company budgets total overhead cost of $7,200,000. the company allocates overhead cost based on 100,000 budgeted direct labor hours. the single plantwide overhead rate is: multiple choice $36 per mh. $36 per dlh. $72 per mh. $72 per dlh. none of the above.
Answer
Explanation:
Step1: Recall overhead - rate formula
Overhead rate = $\frac{Total\ overhead\ cost}{Budgeted\ allocation - base\ quantity}$
Step2: Identify values
Total overhead cost = $7,200,000$, Budgeted direct - labor hours (allocation base) = 100,000
Step3: Calculate overhead rate
Overhead rate=$\frac{7200000}{100000}=72$ per direct - labor hour (DLH)
Answer:
D. $72 per DLH