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Pinnacle Corp. manufactures two products, F and G. The company has chosen to use a plantwide factory overhead rate for allocating overhead to products. However,
Pinnacle Corp. manufactures two products, F and G. The company has chosen to use a plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours. Direct Labor Hours Product Overhead F G (dlh) Painting $309,000 15,000 dlh 16 dlh 4 dlh Dept. Finishing 81,000 10,000 4 16 Dept. Totals $390,000 25,000 dlh 20 dlh 20 dlh Using a single plantwide rate, the factory overhead allocated per unit of Product G is $312 $496 $144 $640 Pinnacle Corp. is considering categorizing support department costs as facil costs. In this case the support department costs wouldn't be applied to the products. Why would this be an incorrect approach to use? Product costs may be inaccurate because support department services may be used more heavily by some products than others. Product costs may be inaccurate because straight-line depreciation on factory equipment is treated as a general and administrative expense on the income statement. Product costs may be inaccurate because incorrect cost drivers are used. Product costs may be inaccurate because direct labor and direct materials are not correctly accounted for in the product costing system. Which of the following are used most frequently in cost accounting to allocate the costs of overhead? O machine dollars, direct labor dollars, and direct labor hours direct labor dollars, direct labor hours, and direct material dollars direct labor dollars, direct labor hours, and machine hours direct labor dollars, direct labor hours, and machine dollars
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