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Question
Red Raider Company uses a plantwide overhead rate with machine hours as the allocation base. Next year, 400,000 units are expected to be produced requiring 1.2 machine hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?
Estimated: Department 1
Manufacturing overhead cost: $2,530,000
Direct Labor Hours: 168,000 DLH
Machine Hours: 30,000 MLH
Department 2
Manufacturing overhead cost: $2,752,000
Direct Labor Hours: 110,000 DLH
Machine Hours: 8,000 MLH
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