Alternative Allocation Base: Nautical Novelties produces two types of bathtub toys: rubber ducks and ships. Both are produced in the same plant on the same assembly line, and the company wants to know how to allocate the manufacturing overhead to the products. The relevant data for the possible allocation bases are as follows

The company has $30,000 in manufacturing overhead to be allocated to these two products.

For each of the five possible allocation bases, calculate the manufacturing overhead that would be allocated to each unit of output.

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Allocation Base Ships Ducks Materials used $20,000 $10,000 Direct labor-hours 10,000 15,000 Direct labor costs $50,000 $70,000 Machine-hours 3,000 2,000 Output 10,000 15,000