Question 3 X Company produces many different products within the same manufacturing plant. It currently uses a single driver, plantwide allocation system to allocate its overhead, with machine hours as the most appropriate cost driver. Estimated machine hours for 2015 are 240,000; estimated overhead is $328,000.

Assume the following information for one of its products, Product 1, in 2015:

Direct materials	$67,000
Direct labor	$15,408
Direct labor hours	963
Machine hours	1,850

3. Using the single driver system, allocate overhead to Product 1 (round overhead rate(s) to two decimal places).

Question 4 Assume that X Company has decided to switch to a departmental allocation system. It has two departments, and will use direct labor hours as the cost driver in Department 1 and machine hours as the cost driver in Department 2. The following are budgeted costs and driver amounts for these two departments in 2015:

	Department 1	Department 2
Overhead	$120,000	$208,000
Direct labor	$640,000	$800,000
Direct labor hours	40,000	50,000
Machine hours	100,000	140,000

Assume the following information for Product 1 in 2015:

	Department 1	Department 2
Direct labor	$12,432	$2,976
Direct labor hours	777	186
Machine hours	1,020	830

4. Using the departmental system, allocate overhead to Product 1 (round overhead rate(s) to two decimal places).

Question 5 Assume that X Company has decided to switch to an activity-based costing allocation system. It has identified three activities with the following budgeted costs and cost drivers for 2015:

Activity	Budgeted cost	Cost driver
Purchasing	$65,600	4,500 purchase orders
Assembly	$164,000	82,800 parts
Packaging	$98,400	12,400 finished units

5. Assume that 570 unis of Product 1 were finished in 2015, requiring 1,045 parts and 43 purchase orders. Using the activity-based costing system, allocate overhead to Product 1 (round overhead rate(s) to two decimal places).