Question
Dawson Company manufactures two products, Regular and Deluxe. Overhead costs consist of $2,500,000 of machining costs, with machine hours as the driver, and $1,250,000
Dawson Company manufactures two products, Regular and Deluxe. Overhead costs consist of $2,500,000 of machining costs, with machine hours as the driver, and $1,250,000 of assembly costs, with direct labor hours as the driver. Other recent data are provided below: Regular Deluxe Direct labor hours 10,000 15,000 Machine hours 10,000 30,000 Number of parts 90,000 160,000 What is the total overhead allocated to Deluxe under a traditional allocation based on number of parts? $1,350,000 $2,400,000 $1,600,000 $2,500,000
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