Question

Kelley Co. has the following data estimated amounts for next year.

Estimated:	Department 1			Department 2
Manufacturing overhead costs	$	50,000		$	60,000
Direct labor hours		180,000	DLH		200,000	DLH
Machine hours		200,000	MH		400,000	MH

What is Kelley Co.'s plantwide overhead rate if direct labor hours are the allocation base? (Round your answer to two decimal places.)

Question 32 options:

	$3.45 per DLH
	$5.45 per DLH
	$.29 per DLH
	$.26 per DLH
	$.20 per DLH

Answer 1

Estimated manufacturing overhead cost of Department 1 = $50,000

Estimated manufacturing overhead cost of Department 2 = $60,000

Total Estimated manufacturing overhead cost = Estimated manufacturing overhead cost of Department 1 + Estimated manufacturing overhead cost of Department 2

= 50,000+60,000

= $110,000

Estimated direct labor hours of Department 1 = 180,000

Estimated direct labor hours of Department 2 = 200,000

Total Estimated direct labor hours = Estimated direct labor hours of Department 1 + Estimated direct labor hours of Department 2

= 180,000+200,000

= 380,000

Plantwide overhead rate = Total Estimated manufacturing overhead cost/ Total Estimated direct labor hours

= 110,000/380,000

= $.29 per direct labor hour

Third option is correct option.

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