W4. Widget.com is a company that produces and sells four different products: Widgets, Gizmos, Doodads, and Thingamabobs. Both Widgets, Gizmos, 81 Thingamabobs are made partially by hand and partially by machine. Doodads are exclusively made by hand. Resources required by each product on a per unit basis Widgets Gizmos Doodads Thingebob Material / unit 2kg 3kg 3kg 2kg Material Cost] kg S 5.00 Labor Hours [ Unit 1.0 1.5 2.5 2.5 I 0L S/Hr $10.00 Machine Hrs / Unit 0.5 1.0 - 1.0 Intensive DL S/Hr $12.00 Annual Production 5,000 3,000 1,000 1,000 Production of Thingamabobs requires a special skill set that is a bit more resource intensive . I The company lepects to incure 51 00,000 of overhead this yearand product 5,000 widgets, 3,000 gizmos, 1,000 doodads, and 1,000 Thingamabobs Allocate the overhead to Widgets, Gizmos, Doodads, and Thingamabobs based on: (1) units produced, (2) labor hours, (3) labor S, and finally (4) machins What is the cost of one unit of each of the products based on each overhead allocation method? Which Method is best? Ovh S Allocation Base 5 Ovh Widgets Gizmos Doodads Thing-bob Total Alloc Rate DL Hrsfi? 1.0 1.5 2.5 2.5 DL Hrs S 100,000 Total DL Hrs , .i'DL Hr units prod lI'unit prod Units Prod 5 100,000 A B D F G H J K L M N O P 28 Q R S T U V W X units prod 29 Units Prod $ 100,000 /unit prod 30 31 32 DL S 100,000 Total DL $ /DL $ 33 34 35 Machine Hrs $ 100,000 Total Mach Hrs /Mach hr 36 37 38 Allocation based on DL Hr Widgets Gizmos Doodads Thing-bob 39 Material 40 DL 41 Ovh DL Hr 42 Total $ $ $ $ Allocation based on DL $ Widgets Gizmos Doodads Thing-bob Material DL Ovh DL $ Total $ $ $ $ Allocation based on Units Produced Widgets Gizmos Doodads Thing-bob Material DL Ovh Units Prod Total $ $ $ $ Allocation based on Machine Hours Widgets Gizmos Doodads Thing-bob Material DL Ovh machine hrs Total $ - $ $ $ Widget 1 | Widget 2 | Widget 3 Widget 4 +