Total Overhead Costs = Maintenance + Materials receiving + Machine setups + Inspection Total Overhead Costs = $20,000 + $80,000 + $50,000 + $30,000 = $180,000 Total Direct Labor Hours = 40,000 Company-Wide Overhead Rate = Total Overhead Costs / Total Direct Labor Hours Company-Wide Overhead Rate = $180,000 / 40,000 hours Company-Wide Overhead Rate = $4.50 per direct labor hour Direct Labor Hours for the Contract = 7,500 Answer Overhead Allocated to the Contract = Company-Wide Overhead Rate * Direct Labor Hours for the Contract Overhead Allocated to the Contract = $4.50 * 7,500 Overhead Allocated to the Contract = $33,750 $33,750 of overhead would be allocated to the contract using a company-wide rate based on direct labor hours