Smokey and the Bandit produces outdoor activity clothing. The product line consists of pants, jackets, tops, and accessories. Data has been collected related to direct materials and direct labor for the four product lines. Smokey and the Bandit has also collected information on four possible cost drivers (units, batches, machine hours, labor hours). All this information is listed below. Construct a spreadsheet that will allocate overhead for each of these alternative drivers and will calculate the total per unit cost for each product line. Use the VLOOKUP function when constructing the spreadsheet so that you can determine the effect of different cost drivers on the overhead allocated and the resulting cost per unit. Show vlookup formula on excel properly, not just number

Product Line    Units Average Sales
Price per unit    Total Material Cost     Total Labor Cost
Pants 4,600    $73    $234,600    $20,115
Jackets 2,500    $98    $145,000    $25,200
Tops 9,800    $36    $156,800    $32,970
Accessories 18,500    $12    $ 37,000    $15,210

Product Line    Batches            Machine Hours        Labor Hours
Pants 42        1,640    1,341
Jackets   26        1,730    1,400
Tops 78        2,600    2,198
Accessories    95        2,250    845

Total overhead cost to be allocated: $321,560

After constructing your spreadsheet answer the following questions?

1.   What is the total cost per unit of each product line when machine hours are used as the cost driver for overhead allocation?
2.   How much overhead is allocated to Jackets when direct labor hours are used as the cost driver for overhead allocation?
3.   What is the total cost of Tops when direct labor hours are used as the cost driver for overhead allocation?
4.   What is the total cost per unit of Accessories when the number of batches is used as the cost driver for overhead allocation?
5.   What is the allocation rate when units are used as the cost driver?
6.   If you are the manager of the Jackets product line which cost driver would you prefer? Why?
7.   Currently the OH cost are being allocated based on DL hours. If the company decides to use units as the cost driver how would you react if you are the Accessories product line manager?

Other information
•   You must create a nicely formatted Excel spreadsheet for the calculations, you need to create either a word document or separate worksheet within your Excel file to answer the questions. You must use the vlookup function.
•   Format the assignment so that it looks appropriate.