Three unique products are manufactured and marketed by abc


Question - Three unique products are manufactured and marketed by ABC Company. ABC's current practice is to apply overhead using a single rate of $8 per direct labor hour. ABC has two production departments with the following traceable costs: Dept 1-$15,000 and Dept. 2-$21,000. The following information applies to the production of cases (12 per case) for Products X, Y, Z:

Product X: Direct Materials is $60, Direct Labor is $60, Overhead is $32 for a total of $152. Machine Hrs per case is 4. #cases/year 150

Product Y: Direct Materials is $88, Direct Labor is $45, Overhead is $24 for a total of $157. Machine Hrs per case is 2. #cases/year 600

Product Z: Direct Materials is $60, Direct Labor is $30, Overhead is $16 for a total of $106. Machine Hrs per case is 3. #cases/year 400

If ABC chooses to use machine hours to allocate overhead, what is the cost per case for each of the three products?

Solution Preview :

Prepared by a verified Expert
Accounting Basics: Three unique products are manufactured and marketed by abc
Reference No:- TGS02854064

Now Priced at $25 (50% Discount)

Recommended (92%)

Rated (4.4/5)