Rawlings Corp. has two product lines, A and B. Rawlings has identified the following information about its overhead and potential cost drivers.

Required:

1. Suppose the Rawlings Corp. uses a traditional costing system with number of labor hours as the cost driver. Determine the amount of overhead assigned to each product line if Product A requires 70% of the labor hours and Product B requires 30%.

2. Suppose Rawlings uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line if Product A consumes 17,000 machine hours and Product B consumes 29,000.

Transcribed Image Text:

Total overhead Cost drivers $75,000 Number of labor hours 2,500 Number of machine hours 46,000