Question

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 $15Total estimated manufacturing overhead $300,000Total cost per unit of RST $80Total estimated machine hours 150,000 MHDirect labor cost per unit of RST $2321 MH per unit of RST.2 MH per unit of RST.20 MH per unit of RST.37.5 MH per unit of RST.38 MH per unit of RST.

Answer 1

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 $15

Total estimated manufacturing overhead $300,000

Total cost per unit of RST $80

Total estimated machine hours 150,000

MH Direct labor cost per unit of RST $232

1 MH per unit of RST.

2 MH per unit of RST.

20 MH per unit of RST.

37.5 MH per unit of RST.

38 MH per unit of RST.

the amount of machine hours estimated per unit = divide total overhead / the number of direct labor hours

300,000/150,000 =2

Step-by-step explanation:

Answer 2

Option (A) is correct.

Step-by-step explanation:

Total estimated manufacturing overhead $300,000

Total estimated machine hours 150,000 MH

Plant-wide overhead rate:

= $300,000 ÷ 150,000 MH

= $2 per MH

Overhead cost per unit :

= Total cost per unit - Direct labor cost per unit - Direct material cost per unit

= $80 - $23 - $15

= $42 per unit

Number of machine hours used to produce one unit of RST :

= Overhead cost per unit ÷ Overhead recovery rate per machine hours

= $42 ÷ ($2 per MH)

= 21 MH