Fact Company allocates $6 overhead to each unit produced. The company uses a plantwide overhead rate with machine hours as the allocation base. Given that the company spends one machine hour per unit, use the amounts below to calculate the number of machine hours expected in department 2.
Estimated: |
Department 1 |
Department 2 |
Manufacturing overhead costs |
$153,000 |
$152,000 |
Direct labor hours |
8,800 DLH |
12,900 DLH |
Machine hours |
40,000 MH |
? MH |
10,833 MH.
9400 MH.
152,400 MH.
13,700 MH.
305,000 MH.
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