Main Street Ice Cream Company uses a plantwide allocation method to allocate overhead based on direct labor hours at a rate of $3 per labor hour Strawberry and vanilla flavors are produced in Department SV Chocolate is produced in Department C Sven manages Department SV and Charlene manages Department C The product costs (per thousand gallons) follow Strawberry Vanilla Chocolate Direct labor (per 1,000 gallons) $ 768 $ 843 $ 1,143 Raw materials (per 1,000 gallons) 818 518 618 Required a If the number of hours of labor per 1,000 gallons is 60 for strawberry, 70 for vanilla, and 100 for chocolate, compute the total cost of 1,000 gallons of each flavor using plantwide allocation b Charlene's department uses older, outdated machines She believes that her department is being allocated some of the overhead of Department SV, which recently bought state of the art machines After she requested that overhead costs be broken down by department, the following information was discovered Department SV Department C Overhead $ 93,906 $ 38,665 Machine hours 25,380 37,800 Labor hours 25,380 18,500 Using machine hours as the department allocation base for Department SV and labor hours as the department allocation base for Department C, compute the allocation rate for each c Compute the cost of 1,000 gallons of each flavor of ice cream using the department allocation rates computed in requirement (b) if the number of machine hours for 1,000 gallons of each of the three flavors of ice cream are as follows strawberry, 60 vanilla, 70 and chocolate, 168 Direct labor hours by product remain the same as in requirement (a) Complete this question by entering your answers in the tabs below Required A Required B Required C If the number of hours of labor per 1,000 gallons is 60 for strawberry, 70 for vanilla, and 100 for chocolate, compute the total cost of 1,000 gallons of each flavor using plantwide allocation Total Cost Strawberry Vanilla Chocolate Total Cost Strawberry Vanilla Chocolate Allocation Rate Department SV per machine hour Department C per labor hour

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 09, 2024

Main Street Ice Cream Company uses a plantwide allocation method to allocate overhead based on direct labor-hours at a rate of $3 per labor-hour. Strawberry

Main Street Ice Cream Company uses a plantwide allocation method to allocate overhead based on direct labor-hours at a rate of $3 per labor-hour. Strawberry and vanilla flavors are produced in Department SV. Chocolate is produced in Department C. Sven manages Department SV and Charlene manages Department C. The product costs (per thousand gallons) follow.

	Strawberry		Vanilla		Chocolate
Direct labor (per 1,000 gallons)	$	768	$	843	$	1,143
Raw materials (per 1,000 gallons)		818		518		618

Required:

a. If the number of hours of labor per 1,000 gallons is 60 for strawberry, 70 for vanilla, and 100 for chocolate, compute the total cost of 1,000 gallons of each flavor using plantwide allocation.

b. Charlene's department uses older, outdated machines. She believes that her department is being allocated some of the overhead of Department SV, which recently bought state-of-the-art machines. After she requested that overhead costs be broken down by department, the following information was discovered:

	Department SV		Department C
Overhead	$	93,906	$	38,665
Machine-hours		25,380		37,800
Labor-hours		25,380		18,500

Using machine-hours as the department allocation base for Department SV and labor-hours as the department allocation base for Department C, compute the allocation rate for each.

c. Compute the cost of 1,000 gallons of each flavor of ice cream using the department allocation rates computed in requirement (b) if the number of machine-hours for 1,000 gallons of each of the three flavors of ice cream are as follows: strawberry, 60; vanilla, 70; and chocolate, 168. Direct labor-hours by product remain the same as in requirement (a).

Complete this question by entering your answers in the tabs below.

Required A
Required B
Required C

If the number of hours of labor per 1,000 gallons is 60 for strawberry, 70 for vanilla, and 100 for chocolate, compute the total cost of 1,000 gallons of each flavor using plantwide allocation.