The Orel Company manufactures products in two departments Mi

The Orel Company manufactures products in two departments: Mixing and Packaging. The company allocates manufacturing overhead using a single plantwide rate with direct labor hours as the allocation base. Estimated overhead costs for the year are $792,000, and estimated direct labor hours are 330,000. In October, the company incurred 15,000 direct labor hours. Read the reguirements, Requirement 1. Compute the predetermined overhead allocation rate. Round to two decimal places. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate allocation rate Requirement 2. Detemine the amount of overhead allocated in October. Begin by selecting the formula to allocate overhead costs. Allocated mfg. s overhead costs The overhead allocated in October is $

Solution

Requirement 1 : CACLULATION OF PREDETERMINED OVERHEAD RATE: Predertermined Overhead allocation rate = Estimated Overhead Cost \"/\" Estimated Direct Labour Hours   \"=\" Predetermined OH Allocate Rate Predertermined Overhead allocation rate = $                                   7,92,000 \"/\" $                               3,30,000 \"=\" $                                       2.40 Requirement 2 : Predetermined OH Aloocate Rate \"X\" By Direct Labor Hours Incurred   \"=\" Allocated Mfg. Overhead Cost $                                           2.40 \"X\" By 15000 \"=\" $                             36,000.00 Answer = Overhead allocated in October = $ 36,000