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Harrison Company expects to incur $600,000 in manufacturing overhead for the coming year. The company makes two products, A and B, and it has accumulated
Harrison Company expects to incur $600,000 in manufacturing overhead for the coming year. The company makes two products, A and B, and it has accumulated the following budget information for the products:
Number of units to be produced Direct labor hours Machine hours Product A 10,000 25,000 15,000 a. Overhead per unit based on direct labor hours b. Overhead per unit based on machine hours Product B 5,000 5,000 30,000 Required: a. Use direct labor hours as the cost driver to compute the allocation rate. Determine the amount of budgeted overhead to be allocated to each unit of product A. Note: Round to the nearest cent. b. Use machine hours as the cost driver to compute the allocation rate. Determine the amount of budgeted overhead to be allocated to each unit of product A. Note: Round to the nearest cent. Allocation Rate Total 15,000 30,000 45,000 Product A
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