Question
Smelly Perfume Company manufactures and distributes several different products. The company currently uses a plant wide allocation method for allocating overhead at a rate of
| Smelly Perfume Company manufactures and distributes several different products. The company currently uses a plant wide allocation method for allocating overhead at a rate of $13 per direct labor hour. Cindy is the department manager of Department C which produces Products J and P. Department C has $22,800 in traceable overhead. Diane is the department manager of Department D which manufactures Product X. Department D has $14,850 in traceable overhead. The product costs (per case of 24 bottles) and other information are as follows: |
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| Products |
|
|
|
| J |
| P |
| X |
| Direct materials | $240.00 |
| $ 173.00 |
| $115.00 |
| Direct labor | 101.00 |
| 75.60 |
| 29.00 |
| Overhead | 48.00 |
| 30.00 |
| 29.00 |
|
|
|
| |||
|
| $389.00 |
| $278.60 |
| $173.00 |
|
|
|
| |||
|
|
|
|
|
|
|
| Machine hours (per case) | 4 |
| 2 |
| 3 |
| Number of cases (per year) | 300 |
| 500 |
| 600 |
| If Smelly changes its allocation basis to machine hours, what is the total product cost per case for Product P? |
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Fundamental Managerial Accounting Concepts
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Old
7th edition
978-0077632427, 77632427, 78025656, 978-0078025655
