Shed Industries produces two products. The products\' identified costs are as fo

Question

Shed Industries produces two products. The products' identified costs are as follows:

  
The company's overhead costs of $114,000 are allocated based on labor cost. Assume 7,000 units of product A and 8,000 units of Product B are produced. What amount of production costs would be assigned to Product A?

The company's overhead costs of $114,000 are allocated based on labor cost. Assume 7,000 units of product A and 8,000 units of Product B are produced. What amount of production costs would be assigned to Product A?

the anwer is 33k how do I get that

Product A Product B   Direct materials $23,000       $18,000         Direct labor 11,000       27,000      

Explanation / Answer

Overhead Assigned to A are $33,000 as shown below Particulars Product A Product B Total Direct Labour          11,000.00             27,000.00     38,000.00 Allocation of O/H To A = 114,000/38,000 *11,000 B = 114,000/38,000*27,000          33,000.00             81,000.00 114,000.00 Particulars Product A Product B Direct Materials          23,000.00             18,000.00 Direct Labour          11,000.00             27,000.00 O/H          33,000.00             81,000.00 Total Costs          67,000.00           126,000.00

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