Duncan Company manufactures two products Regular and Supreme

Duncan Company manufactures two products, Regular and Supreme. Duncan’s overhead costs consist of machining, $124,529; and assembling, $69,737. Information on the two products is: Regular Supreme Machine Hours 10,000 15,000 Direct Labor Hours 10,000 30,000 Number of parts 80,000 170,000 Overhead applied to Supreme using activity-based costing is. (Note you have to chose the appropriate cost drivers)

Solution

Two products are manufactured. Regular and Supreme.
Overhead costs consist of machining, $124,529; and assembling, $69,737

Information on the two products is:
Regular
Direct labor hours 10,000
Machine hours 10,000
Number of parts 80,000

Supreme
Direct labor hours 15,000
Machine hours 30,000
Number of parts 170,000

Allocation rate = (124,529+69,737)/25000 = 7.77

Overhead applied to Supreme = 7.77 * 15000 = 116,559.6