Gold Company uses a plantwide overhead rate with machine hours
as the allocation base. Use the following information to solve for
the amount of machine hours estimated per unit of product
RST.
Direct material cost per unit of RST | $ | 28 | ||
Total estimated manufacturing overhead | $ | 326,000 | ||
Total cost per unit of RST | $ | 93 | ||
Total estimated machine hours | 163,000 | MH | ||
Direct labor cost per unit of RST | $ | 36 | ||
Multiple Choice
14.50 MH per unit of RST.
2.00 MH per unit of RST.
23.25 MH per unit of RST.
62.50 MH per unit of RST.
64.00 MH per unit of RST.
Estimated manufacturing overhead per unit = Total cost per unit of RST - Direct material cost per unit of RST - Direct labor cost per unit of RST
= $93 - $28 - $36
= $29 per unit
Estimated manufacturing overhead per MH = Total estimated manufacturing overhead /Total estimated machine hours
= $326,000 / 163,000
= $2 per MH
Machine hours estimated per unit = Estimated manufacturing overhead per unit / Estimated manufacturing overhead per MH
= $29 / $2
= 14.50 MH per unit of RST
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