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Munoz Company makes three products in its factory: plastic cups, plastic tablecloths, and plastic bottles. The expected overhead costs for the next fiscal year include
Munoz 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 managers salary | $ | 235,750 | |
Factory utility cost | 78,000 | ||
Factory supplies | 24,000 | ||
Total overhead costs | $ | 337,750 | |
Munoz uses machine hours as the cost driver to allocate overhead costs. Budgeted machine hours for the products are as follows.
Cups | 280 | Hours | |
Tablecloths | 700 | ||
Bottles | 950 | ||
Total machine hours | 1,930 | ||
Required
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Allocate the budgeted overhead costs to the products.
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