Question
On January 1, 2021, X Company estimated the following costs for the year: Direct materials $57,700 Customer relations 96,900 Direct labor 96,900 Factory supplies 21,600
On January 1, 2021, X Company estimated the following costs for the year:
Direct materials | $57,700 |
Customer relations | 96,900 |
Direct labor | 96,900 |
Factory supplies | 21,600 |
Factory maintenance | 30,400 |
Marketing research | 40,900 |
Factory rent | 41,800 |
Sales salaries | 49,000 |
Legal department costs | 96,900 |
Factory insurance | 61,100 |
The company also estimated that total direct labor hours for the year would be 5,700, and total machine hours would be 66,000.
The company finished Product A in June. It required 684 direct labor hours at a cost of $19,380. It also required 5,280 machine hours.
If X Company uses a plantwide system to allocate overhead costs, with direct labor cost as the cost driver, how much overhead was allocated to Product A [round overhead rate(s) to two decimal places]?
Please show work
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