During the most recent accounting period TLC made 8,400 units of its small tiffany style lamps. Making the lamps required 2,300 labor hours, 64 setups, and consumed 10% of the product-level costs. If the Company uses direct labor hours as the single company wide cost driver, the amount of overhead cost allocated to the tiffany lamps is Multiple Choice $8,700. $45,540. $22,700. $36,618.

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Missing Part of the Question

These data represent total costs for all types of lamps produced by the Company.

Activity Center Unit-level --- Batch-level --- Product-level --- Facility-level

Overhead Cost $60,000 $24,000 $12,000 $72,000

Cost Driver 10,000 labor hrs 480 setup % of use 72,000 units

Allocation Rate. $6 per labor hr. $ 50 per setup $ 1 per unit

Total Allocation Overhead = $38,640

Explanation:

Given.

Labour hours = 2,300

To calculate the total allocated overhead,

First we'll calculate the allocation rate.

Allocation Rate is calculated by: Cost to be allocated / Allocation base

Where Cost to be allocated= $60,000 + $24,000 + $12,000 + $72,000

Cost to be allocated = $168,000

Allocation Base = Cost Driver at unit level = 10,000 labour hours.

So, Allocation Rate = $168,000/10,000

Allocation Rate = $16.8 per hour

Now, to get the Total allocated overhead;

It is calculated by

Allocation rate * Weight of the base

Where Allocation Rate = $16.8 per hour

Weight of the base = 2,300 labour hours Given

Total Allocated Overhead = 2300 labour hours * $16.8

Total Allocated Overhead = $38,640

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