Problemlake prairie company uses a plantwide overhead rate, Ask an Expert

Accounting

Problem:

Lake Prairie Company uses a plantwide overhead rate with machine hours as the allocation base. Next year, 120,000 units are expected to be produced taking 0.80 machine hours each.

Required:

Question: How much overhead will be assigned to each unit produced given the following estimated amounts?

Note: Please provide step by step solution.

Estimated:	Department 1	Department 2
Manufacturing overhead costs	$5,386,000	$2,457,000
Direct hours	500,000 DLH	550,000 DLH
Machine hours	340,000 MH	280,000 MH

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91165918

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