Bugaboo Co. manufactures three types of cookies: Fluffs, Crinkles, and Snaps. The production process is relatively simple, and factory overhead costs are allocated to products using a single plantwide factory rate based on direct labor hours. Information for the month of May, Bugaboo's first month of operations, follows:

	Budgeted Unit Volume	Direct Labor Hours Per Unit
Fluffs	80,000 boxes	0.10
Crinkles	60,000 boxes	0.20
Snaps	20,000 boxes	0.50

Bugaboo has budgeted direct labor costs for May at $8.50 per hour. Budgeted direct materials costs for May are: Fluffs, $0.75/unit; Crinkles $0.40/unit; and Snaps $0.30/unit.

Bugaboo's budgeted overhead costs for May are:

Indirect labor	$280,000
Utilities	65,000
Supplies	45,000
Depreciation	30,000
Total	$420,000

Assume that Bugaboo sells all the boxes it produces in May. Round your answers to two decimal places, if necessary.

a. Compute Bugaboo's plantwide factory overhead rate for May. $fill in the blank 1 per direct labor hour

b. Compute the product cost in May for each type of cookie.

	Fluffs			Crinkles			Snaps
Cost per box	$fill in the blank 2			$fill in the blank 3			$fill in the blank 4

c. Does Bugaboo's use of a plantwide factory overhead rate in any way distort the product costs for May?

Yes, a higher overhead rate is charged to the product using the highest amount of the allocation base.No, a lower overhead rate is charged to the product using the highest amount of the allocation base.