Question

Kay Company budgets overhead cost of $4,104,000 for the next year. The company uses direct labor hours as its overhead allocation base. If 90,000 direct labor hours are planned for the next year, how much overhead would be assigned to a product requiring 5 direct labor hours

Answer 1

Based on the fact that Kay Company will use direct labor hours as its overhead allocation base, the overhead for a product with 5 labor hours is $228.

What is the overhead assigned to the product?

This can be found as:

= Total overhead cost / Number of labor hours x Product labor hours

Solving gives:

= 4,104,000 / 90,000 x 5

= 45.6 x 5

= $228

Find out more on assigning overhead costs at https://brainly.com/question/22812280.

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