Question
Asked Oct 13, 2019
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Boswell Company manufactures two products, Regular and
Supreme. Boswell's overhead costs consist of machining,
$4800000; and assembling, $2400000. Information on the
two products is:
Regular Supreme
15000
10000
Direct labor hours
30000
10000
Machine hours
160000
90000
Number of parts
Overhead applied to Regular using traditional costing using
direct labor hours is
O $2190000.
O $4320000.
O $2880000.
O $5010000.
hp
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Boswell Company manufactures two products, Regular and Supreme. Boswell's overhead costs consist of machining, $4800000; and assembling, $2400000. Information on the two products is: Regular Supreme 15000 10000 Direct labor hours 30000 10000 Machine hours 160000 90000 Number of parts Overhead applied to Regular using traditional costing using direct labor hours is O $2190000. O $4320000. O $2880000. O $5010000. hp

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Expert Answer

Step 1

Predetermined Overhead Rate: 

Predetermined overhead rate is a measure used to allocate the estimated manufacturing overhead cost to the products or job orders during a particular period. This is generally evaluated at the beginning of each reporting period. The evaluation takes into account the estimated manufacturing overhead cost and the estimated allocation base that includes direct labor hours, direct labor in dollars, machine hours and direct materials.

Step 2

Compute the Predetermined Overhead Rate:

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Total Overhead Cost Predetermined Overhead Rate Total Direct Labor Hours $4,800.000 $2,400.000 10,00015.000 =$288per direct labor Hour

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Step 3

Compute the overhead applied to regu...

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Predetermined Overhead Ratex Direct Labor Hours of Supreme Overhead applied to regular product $288 x10,000 hours $2.880,000

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