Blalock Company manufactures and distributes several different products. The companyCameron Company has two major segments with the following information:

The business also has overhead costs as follows: NOTE: overhead does not include salesperson

salaries.

Required: a$.$ Determine the income of each segment if overhead costs are allocated based on

sales revenue.

b$.$ Determine the income of each segment if overhead costs are allocated using activity$-$based

cost drivers.

currently uses a plantwide allocation method for allocating overhead at a rate of $$10$ per

direct labor hour. Department A produces Products #$101$X and #$102$Y$.$ Department A has

$$262,000$ in traceable overhead. Department B manufactures Product #$103$Z$.$ Department B

has $$128,000$ in traceable overhead. The product costs $($per unit$)$ and other information are as

follows:

Direct materials

Direct labor

Overhead

Machine hours $($per unit$)$

Number of cases $($per year$)$

Required:

a$.$ If Blalock changes its allocation basis to machine hours, what is the total overhead cost per

unit for Product $101$X$,102$Y$,$ and $103$Z$?$

b$.$ If Blalock changes its overhead allocation to departmental rates, what is the overhead cost per

unit for Product $101$X$,102$Y$,$ and $103$Z$,$ assuming Departments A and B use direct labor hours

and machine hours as their respective allocation bases?