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Hercules Hair Restorer Inc. (HHRI) makes many varieties of hair restoration products which are sold under well-known marketing labels. A single batch contains 10,000 8
Hercules Hair Restorer Inc. (HHRI) makes many varieties of hair restoration products which are sold under well-known marketing labels. A single batch contains 10,000 8 oz. bottles and takes two days to make. Typically 15 batches are completed per month, for different brands. Basic cost data for the month of January appears below. Indirect $2,200 Hair by Bottle Bath Cost January's other Zeus per expenses Oil, fl. oz. 2 $3 Supervision $8,000 Lotion, fl. A oz. materials Zeus Equipment potion, fl. 1/4 $24 deprec& $14,520 oz. repairs Plant Alcemena $48 manager's $6,500 scent salary Bottle, 1 Utilities $1,800 cap, label Direct labor 50 $14 $33,020 hour 1/16 Machine hours If overheads for January are calculated per machine hour, which is correct? : O a. The hourly overhead absorption rate will be $275.17 per machine hour O b. The overheads per bottle are not relevant for absorption cost systems c. The full cost of 20 bottles is $385.80 o d. The hourly overhead absorption rate will increase to $2,201.33 e. (c) and (d) only
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