MBA $620-$ Professor Miller

In$-$Class Activity $-$ Week $5$

Instructions: Complete this worksheet during class and upload your completed worksheet to Blackboard. Your answers may be in bullet point format. You may submit a digital version or a photo of a handwritten copy.

Part I

Vite Chic is a clothing manufacturer currently selling two products, a buttondown shirt and a cotton T$-$shirt, which are produced in the same factory. Factory overhead totaled $$175,000$ last year:

Salaries for two supervisors, each earning $$50,000$ per year, who supervise the production of both shirts

Utility costs of $$75,000$

Resource use for the two shirts was as follows:

$\backslash$table$[[,\backslash$table$[[$Button$-],[$down$]],\backslash$table$[[$T$-],[$shirt$]],$Total$],[\backslash$table$[[$Machine$],[$hours$]],125,625,750],[$Labor hours,$150,350,500]]$

a$)$ How much overhead should be assigned to each shirt if labor hours are the cost driver?

b$)$ How much overhead should be assigned to each shirt if machine hours are the cost driver?

c$)$ How much overhead should be assigned to each product using activity$-$based costing?