Exercise 12-6 Allocating overhead cost among products LO 12-3 Chandler Hats Corp

Question

Exercise 12-6 Allocating overhead cost among products LO 12-3 Chandler Hats Corporation manufactures three difierent models of hats: Vogue, Beauty, and Glamour Chandler expects to incur $648,000 of overhead costs during the next fiscal year. Other budget information follows Direct labor hours 5,000 7,000 6,000 18,000 Machine hours 1300 1,400 1,800 4,500 Required a. Use direct labor hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product Vogue Beauty Glamour Total b. Use machine hours as the cost driver to compute the allocation rabe and the budgeted overhead cost for each product Vogue 0 Type here to search 6 R. YU

Explanation / Answer

a Allocation rate = 648000/18000= 36 Product Allocation rate Weight of base Allocated cost Vogue 36 5000 180000 Beauty 36 7000 252000 Glamour 36 6000 216000 Total 648000 b Allocation rate = 648000/4500= 144 Product Allocation rate Weight of base Allocated cost Vogue 144 1300 187200 Beauty 144 1400 201600 Glamour 144 1800 259200 Total 648000

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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