Use your imagination. Come up with a few products (any product) that you will be producing. These products will require the 3 basic components - DM, DL, & OH. The OH is what you will need to allocate to your products. Tell me HOW you will do that. Based on what rate. What's the driver? Etc.

The requirements for this discussion include the following:

1) Indicate your products.

2) Indicate what is included in your overhead.

2) How will you allocate the overhead to your products?

NOTES:

• use your imagination! Your product can be a physical item your are producing, it can be people, etc. Make up a story or situation where there is a 'cost' that is is NOT DIRECT and that needs to be split (allocated/ assigned/ applied) to the units. Be creative.
• you don't need to do the actual math, but tell me HOW you will split those costs. Based on WHAT (we are talking about the cost driver).