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Exercise 12-7A (Algo) Allocating overhead costs among products LO 12-3 Fanning Company makes three products in its factory: plastic cups, plastic tablecloths, and plastic
Exercise 12-7A (Algo) Allocating overhead costs among products LO 12-3 Fanning Company makes three products in its factory: plastic cups, plastic tablecloths, and plastic bottles. The expected overhead costs for the next fiscal year include the following. Factory manager's salary Factory utility cost Factory supplies Total overhead costs $247,250 76,000 25,000 $348,250 Fanning uses machine hours as the cost driver to allocate overhead costs. Budgeted machine hours for the products are as follows. Cups Tablecloths Bottles Total machine hours 290 Hours 725 975 1,990 Required a. Allocate the budgeted overhead costs to the products. Allocation Rate x Weight of Base Allocated Cost Product Cups $ Tablecloths Bottles Total 175 x 175 x 175 x = $ = 0 0 $ 0
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