Exercise 12-7 Allocating overheed costs among products LO 12-3 Cain Company make
ID: 2582485 • Letter: E
Question
Exercise 12-7 Allocating overheed costs among products LO 12-3 Cain Company makes three products in its factory plastic cups, plastic tablecloths, and plastic bottles. The expected overhead costs for the next fiscal year include the following Faciory managers salary $276,00 Factory utility cost 122,000 143,800 Factory supplies Total overhead costs $541,800 Cain uses machine hours as the cost driver to allocat products are as follows te overhead costs. Budgeted machine hours for the Cups Tablecloths Bottles 450 Hours 900 1230 Total machine hours 2,580 Required a-ABocate the budgeted overhead costs to the products Product Allocation Rate x Weight of Base Allocated Cost 2 ERSC Additional Sy pdf ^ EFSC Additional Sy--Pdf ^ Type here to searchExplanation / Answer
Allocation rate = Total over head cost/ total machine hour
= $ 541,800/2,580 = $ 210
Products
Allocation Rate
Weight of Base
Allocated Cost
Cups
$ 210
450
$ 94,500
Tablecloths
$ 210
900
$ 189,000
Bottles
$ 210
1,230
$ 258,300
Total
2,580
$ 541,800
Products
Allocation Rate
Weight of Base
Allocated Cost
Cups
$ 210
450
$ 94,500
Tablecloths
$ 210
900
$ 189,000
Bottles
$ 210
1,230
$ 258,300
Total
2,580
$ 541,800
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