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Bluefield Corp. has two product lines, A and B. Bluefield has identified the following information about its overhead and potential cost drivers: Total overhead Cost
Bluefield Corp. has two product lines, A and B. Bluefield has identified the following information about its overhead and potential cost
drivers:
Total overhead
Cost drivers
Number of labor hours
Number of machine hours
$63. 600
2,700
40. 000
Required:
1. Suppose Bluefield Corp. uses a traditional costing system with number of labor hours as the cost driver. Determine the amount of
overhead assigned to each product line if Product A requires 76 percent of the labor hours and Product B requires 24 percent.
2. Suppose Bluefield uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead
assigned to each product line if Product A consumes 17.000 machine hours and Product B consumes 23.000.
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