Problem 1: Main Street Ice Cream Company uses a plant-wide allocation method to allocate overhead based on direct labor-hours at a rate of $5 per labor-hour. Strawberry and vanilla flavors are produced in Department SV and chocolate is produced in Department C. Sven manages Department SV and Charlene manages Department C. The product costs (per thousand gallon) follow: Strawberry Vanilla Chocolate Direct Labor (per 1000 gallons) $1,000 $1,100 $1,500 Raw material (per 1000 gallons) $800 $500 $600 If the number of hours of labor per 1,000 gallons is 50 for strawberry, 55 for vanilla, and 75 for chocolate, compute the total cost of 1,000 gallons of each flavor. Problem 2: For the Main Street Ice Cream Company presented in Problem 1, Charlene's department uses older, outdated machines.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 by department, the following information for that month was discovered: Department SV Department C Overhead $176,400 $39,600 Machine-hours 25,200 36,000 Labor-hours 25,200 18,000 (a) Using machine hours as the department allocation base for Department SV and labor-hours as the department base for Department C, compute the allocation rate for each department. (b) Compute the cost of 1,000 gallons of each flavor of ice cream using department allocation rates computed in (a) if the number of machine-hours for 1,000 gallons of each of the three flavors of ice cream are as follows: strawberry, 50; vanilla, 55; and chocolate, 150. (c) Was Charlene correct in her belief? What happened to the cost of chocolate when the department allocation was used? Which costing method provides more accurate product costs