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The Coca-Cola Company allocates its overhead costs to three production departments: Bottling, Packaging, and Distribution. The total overhead costs for the period are $2,000,000. The
The Coca-Cola Company allocates its overhead costs to three production departments: Bottling, Packaging, and Distribution. The total overhead costs for the period are $2,000,000. The allocation bases and usage for each department are as follows:
Department | Allocation Base | Usage |
Bottling | Machine Hours | 10,000 |
Packaging | Direct Labor Hours | 15,000 |
Distribution | Miles Traveled | 50,000 miles |
Calculate the overhead allocation rate for each department and discuss how these rates reflect the utilization of resources in each department.
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