Answer:
Allocated MOH= $443,120
Explanation:
Giving the following information:
The total factory overhead budget= $630,400
Estimated direct labor hour= 330,800
Deluxe widget production requires 4 direct labor hours for each unit
Regular widget production requires 6 direct labor hours for each unit.
I will assume that this is the required solution:
Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Challenger Factory allocate to deluxe widget production if budgeted production for the period is 49,700 units and actual production for the period is 58,000 units?
Solution:
First, we need to calculate the plantwide predetermined overhead rate:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 630,400/330,800= $1.91 per direct labor hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 1.91* (58,000*4)= $443,120
