Question

Case company allocates $5 overhead to each unit produced. the company uses a plantwide overhead rate with machine hours as the allocation base. given the amounts below, how many machine hours does the company expect in department 2?

Answer 1

Let Department 2 Machine hours Be x, and using the equation below.

Find ATQ :

5= (440000 + 245000) / (74000 + x)

=> 370000 + 5x = 685000

=>x = 63000

Therefore, there are 63,000 machine hours that the company expects in Department 2.