16

Red Raider Company uses a plantwide overhead rate with direct labor hours as the allocation base. Next year, 540,000 units are expected to be produced requiring 0.90 direct-labor hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?

Estimated:	Department 1					Department 2
Manufacturing overhead costs	$	2,558,000				$	942,000
Direct labor hours		182,000	DLH				124,000	DLH
Machine hours		31,400	MH				9,400	MH

Multiple Choice

• $60.08 per unit

• $10.29 per unit

• $14.05 per unit

• $6.82 per unit

• None of the choices