1. Company: VWX Manufacturing

Scenario: Cost Allocation

Data:

• Department A Costs: $400,000
• Department B Costs: $300,000
• Department C Costs: $200,000
• Direct Labor Hours: Department A (20,000), Department B (15,000), Department C (10,000)

Requirements:

1. Allocate costs based on direct labor hours.
2. Calculate the cost per direct labor hour.
3. Discuss the benefits of accurate cost allocation.
4. Recommend ways to improve cost allocation accuracy.