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Category > Accounting Posted 07 May 2018 My Price 7.00

Dew Hats Corporation

Allocating overhead cost among products

Dew Hats Corporation manufactures three different models of hats: Vogue, Beauty, and Glamour. Dew expects to incur $576,000 of overhead cost during the next fiscal year. Other budget infor- mation follows.

 

 

 

Direct labor hours

Vogue

2,000

Beauty

4,000

Glamour

6,000

Total

12,000

Machine hours

1,200

1,400

1,400

4,000

Required

         
  1. Use direct labor hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product.

  2. Use machine hours as the cost driver to compute the allocation rate and the budgeted over- head cost for each product.

  3. Describe a set of circumstances where it would be more appropriate to use direct labor hours as the allocation base.

  4. Describe a set of circumstances where it would be more appropriate to use machine hours as the allocation base.

Answers

(5)
Status NEW Posted 07 May 2018 04:05 PM My Price 7.00

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