Question
Smelly Perfume Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead at a rate of $12
Smelly Perfume Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead at a rate of $12 per direct labor hour. Cindy is the department manager of Department C which produces Products J and P. Department C has $21,600 in traceable overhead. Diane is the department manager of Department D which manufactures Product X. Department D has $14,400 in traceable overhead. The product costs (per case of 24 bottles) and other information are as follows:
| Products | |||||
| J | P | X | |||
| Direct materials | $230.00 | $ 166.00 | $110.00 | ||
| Direct labor | 97.00 | 72.45 | 28.00 | ||
| Overhead | 46.00 | 29.00 | 28.00 | ||
| $373.00 | $267.45 | $166.00 | |||
| Machine hours (per case) | 4 | 2 | 3 | ||
| Number of cases (per year) | 300 | 500 | 600 |
| If Smelly changes its overhead allocation to departmental rates, what is the product cost per case for Product X assuming Departments C and D use direct labor hours and machine hours as their respective allocation bases? |
rev: 11_18_2013_QC_40512
$163.00.
$171.84.
$138.00.
$162.00.
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