Lake Erie Company uses a plantwide overhead rate with machine hours as the allocation base. Next year, 600,000 units are expected to be produced taking 0.75 machine hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?Estimated:Department 1Department 2Manufacturing overhead costs$3,107,500 $1,520,000 Direct labor hours 150,000DLH 250,000DLHMachine hours 250,000MH 175,000MH
A. $5.61 per unit
B. $11.57 per unit
C. $12.43 per unit
D. $10.89 per unit
E. $8.17 per unit
Answer: E
Business
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