The overhead cost per unit for Henry Company, which allocates overhead cost using a single plantwide rate of $80 per direct labor hour, is $240.
What is a single plantwide overhead rate?
The single plantwide overhead rate is the rate that a company uses to allocate all of its manufacturing overhead costs to products or cost objects where the activity-based costing system is not used.
The single plantwide overhead rate is calculated by dividing the total estimated manufacturing overhead costs by the total estimated direct labor hours or machine hours, as the case may be.
Data and Calculations:
Predetermined overhead rate = $80
Direct labor hour per unit = 3 hours
Machine hours per unit = 2 hours.
The overhead cost per unit = $240 ($80 x 3)
Thus, the overhead cost per unit for Henry Company, which allocates overhead cost using a single plantwide rate of $80 per direct labor hour, is $240.
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