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Exercise 4-6A Allocating overhead costs among products LO 4-3 Thornton Company makes three products in its factory: plastic cups, plastic tablecloths, and plastic bottles. The
Exercise 4-6A Allocating overhead costs among products LO 4-3 Thornton 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 $219,450 74,000 25,000 $318,450 Total overhead costs Thornton uses machine hours as the cost driver to allocate overhead costs. Budgeted machine hours for the products are as follows: 280 Hours Cups Tablecloths 700 Bottles 950 1,930 Total machine hours Required a. Allocate the budgeted overhead costs to the products. 280 Hours Cups Tablecloths 700 950 Bottles 1,930 Total machine hours Required a. Allocate the budgeted overhead costs to the products. Product Allocation Rate Weight of Base = Allocated Cost X Cups X = Tablecloths X Bottles X Total
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