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ABC product profitability Outerwear Inc. is concerned about the profitability of its regular gloves. Company managers are considering producing only the top-quality, fleece lined,
ABC product profitability Outerwear Inc. is concerned about the profitability of its regular gloves. Company managers are considering producing only the top-quality, fleece lined, gloves The company is currently assigning the $2,400,000 of overhead costs to both types of gloves based on machine hours. Of the overhead, $960,000 is utilities related and the remainder is primarily related to quality control inspectors salaries. The following information about the products is also available. Regular fleece-Lined Number produced 2,000,000 Machine hours Inspection hours Revenges Direct costs 1,400,000 170,000 30,000 10.000 50.000 $7,650,000 $6.720.000 $6.000.000 $5.280.000 a. Determine the total overhead cost assigned to each type of gloves using the current allocation system. Total OH assigned to regular gloves: $ 0 Total OH assigned to fleece-lined gloves: $ 0
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