Finch Hats Corporation manufactures three different models of hats: Vogue, Beauty, and Glamour. Finch expects to incur $615,000 of overhead cost during the next fiscal year. Other budget information follows. Vogue 3,000 1,000 Beauty Glamour Total 7,000 2,725 5,000 1,400 15,000 5,125 Direct labor hours Machine hours Required a. Use direct labor hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product. b. Use machine hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product.
Finch Hats Corporation manufactures three different models of hats: Vogue, Beauty, and Glamour. Finch expects to incur $615,000 of overhead cost during the next fiscal year. Other budget information follows. Vogue 3,000 1,000 Beauty Glamour Total 7,000 2,725 5,000 1,400 15,000 5,125 Direct labor hours Machine hours Required a. Use direct labor hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product. b. Use machine hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Required A
Required B
Use machine hours as the cost driver to compute the allocation rate and the
Product
Allocation Rate x Weight of Base
= Allocated Cost
Vogue
Beauty
X
%3D
Glamour
Total
II
II
Transcribed Image Text:Finch Hats Corporation manufactures three different models of hats: Vogue, Beauty, and Glamour. Finch expects to incur
$615,000 of overhead cost during the next fiscal year. Other budget information follows.
Vogue
3,000
1,000
Beauty Glamour
5,000
7,000
1,400
2,725
Total
Direct labor hours
15,000
5,125
Machine hours
Required
a. Use direct labor hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each
product.
b. Use machine hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each
product.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Use direct labor hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product.
Product
Allocation Rate
x Weight of Base = Allocated Cost
Vogue
X
Beauty
Glamour
Total
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