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exercise 4-6A allocating overhead cost amoung products Cain Company makes three products in its factory: plastic cups, plastic tablecloths , and plastic bottles. The expected

exercise 4-6A allocating overhead cost amoung products Cain Company makes three products in its factory: plastic cups, plastic tablecloths , and plastic bottles. The expected overhead cost for the next fiscal year include the fallowing factory managers salary $175,000 Factory utility cost 64,000 factory supplies 11,000 total overheard costs $250,000 Cain uses machine hours as the cost driver to allocate overhead cost budgeted machine hours for the products are as fallows cups 200 Hours Tablecloths 600 Bottles 800 Total machine hours 1600 Required a) Allocate the budgeted overhead costs to the products. b) Provide a possible explanation as to why cain chose machine hours , instead of labor hours as the allocation base.

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