Rawlings Corp. has two product lines, A and B. Rawlings has identified the following information about its
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Question:
Rawlings Corp. has two product lines, A and B. Rawlings has identified the following information about its overhead and potential cost drivers: Total overhead $112,500 Cost Drivers Number of labor hours 2,500 Number of machine hours 59,800
1. Suppose the Rawlings Corp. uses a traditional costing system with number of labor hours as the cost driver. Determine the amount of overhead assigned to each product line if Product A requires 70% of the labor hours and Product B requires 30%.
2. Suppose Rawlings uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line if Product A consumes 22,100 machine hours and Product B consumes 37,700.
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