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Bluefield Corporation has two product lines, A and B. Bluefield has identified the following information about its overhead and potential cost drivers: Total overhead $
Bluefield Corporation has two product lines, A and B. Bluefield has identified the following information about its overhead and potential cost drivers:
Total overhead | $ 113,620 |
---|---|
Cost drivers | |
Number of labor hours | 2,500 |
Number of machine hours | 59,800 |
Required:
- Suppose Bluefield Corporation 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 70 percent of the labor hours and Product B requires 30 percent.
- 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 requires 22,100 machine hours and Product B requires 37,700.
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