Main Street Ice Cream Company uses a plantwide allocation method to allocate ove

Question

Main Street Ice Cream Company uses a plantwide allocation method to allocate overhead based on direct labor-hours at a rate of $3 per labor-hour. Strawberry and vanilla flavors are produced in Department SV. Chocolate is produced in Department C. Sven manages Department SV and Charlene manages Department C. The product costs (per thousand gallons) follow:

Main Street Ice Cream Company uses a plantwide allocation method to allocate overhead based on direct labor-hours at a rate of $3 per labor-hour. Strawberry and vanilla flavors are produced in Department SV. Chocolate is produced in Department C. Sven manages Department SV and Charlene manages Department C. The product costs (per thousand gallons) follow: Strawberry Vanilla Chocolate Direct labor (per 1,000 gallons) Raw materials (per 1,000 gallons) $756 806 1.11 506 51,1:11 606 Required a. If the number of hours of labor per 1,000 gallons is 58 for strawberry, 68 for vanila, and 60 for chocolate, compute the total cost of 1,000 gallons of each flavor using plantwide allocation. Total Cost Strawberry Chocolate

Explanation / Answer

Strawberry Vanila Chocolate Direct Labor (per 1,000 gallons)           756.00       831.00        1,131.00 Raw Material (per 1000 gallons)           806.00       506.00           606.00 Overheads(hrs per 1000 gallons*3)           174.00       204.00           180.00 Total Cost       1,736.00    1,541.00        1,917.00 a Total Cost Strawberry       1,736.00 Vanila       1,541.00 Chocolate       1,917.00 Allocation Rate Base Department SV =88410/25260               3.50 Per Machine Hour Department C =35880/18400               1.95 Per Labor Hour c Total Cost Strawberry       1,765.00 Vanila       1,575.00 Chocolate       1,854.00 Working Note Strawberry Vanila Chocolate Direct Labor (per 1,000 gallons)           756.00       831.00        1,131.00 Raw Material (per 1000 gallons)           806.00       506.00           606.00 Overheads(hrs per 1000 gallons*rate)           203.00       238.00           117.00 Total Cost       1,765.00    1,575.00        1,854.00 Strawberry Vanila Chocolate Machine Hrs             58.00          68.00 Labor Hrs              60.00 Rate               3.50            3.50                1.95 Overhead per 1000 hrs           203.00       238.00           117.00

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.