Alternative Allocation Bases: Wayne's Western Co. produces two styles of cowboy boots: standard and deluxe. The difference between the two is in the amount of handcrafting that is done. The deluxe boot uses more skilled labor because additional cutting and trimming is done by hand, which is not done for the standard boot. The relevant figures for the year just completed are given below.

The company has $750,000 in manufacturing overhead costs to allocate to these two product lines.

For each of the five potential allocation bases, determine the amount of manufactur- ing overhead that would be allocated to each unit of output.

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Allocation Base Standard Deluxe Materials used Direct labor-hours $200,000 $ 100,000 100,000 Direct labor costs $700,000 Machine-hours 40,000 Output, in pairs 80,000 150,000 $1,800,000 10,000 15,000