RC Ice Cream produces three products and allocates overhead cost using a plantwide rate of $2 per direct labor hour. Strawberry and Vanilla uses

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RC Ice Cream produces three products and allocates overhead cost using a plantwide rate of $2 per direct labor hour. Strawberry and Vanilla uses the facilities of Dept SV while Chocolate uses Dept C. the product costs per thousand gallon are: Direct Materials Direct Labor Strawberry $ 800 750 Vanilla $ 500 Chocolate $ 600 825 1,125 Per 1,000 gallons, the direct labor hours used is 75 strawberry, 85 vanilla and 95 chocolate. Required: a) Compute for total cost if the allocation base is plantwide. b) The Manager of Dept C believes that using plant wide rate is unfair for her department since Dept SV is using state-of-the-art machines. She recommends that overhead should be allocated department wide based on the machine hours for Dept SV and direct labor hours for Dept C. You are given the following additional information: Overhead Machine hours Labor hours Dept SV Dept C $107,100 $23,750 25,200 38,000 25,200 19,000 c) Compute the cost of 1,000 gallons for each flavor using the department rates in b) For every 1,000 gallons of each flavor, the following are the machine hours used are 75 for Strawberry, 85 for Vanilla and 105 for chocolate. Direct labor hours are the same as given in information a). d) Is the manager's recommendation right? Compare the overhead costs of a and b and explain. Which costing method is more accurate? Explain.