lawless Cosmetic Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead at a rate of $7 per direct labor-hour. Loren is the department manager of the Makeup Department that produces Concealer (C) and Glow Cream (GC). Jennifer is the department manager of the Hair Care Department that manufactures Shampoo (S). The product costs (per case of 24 bottles) and other information are as follows: Products C GC S Direct materials $ 100.00 $ 72.00 $ 48.00 Direct labor 42.00 31.50 12.00 Overhead 28.00 21.00 14.00 $ 170.00 $ 124.50 $ 74.00 Machine-hours 4 2 3 Number of cases (per year) 300 500 600
lawless Cosmetic Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead at a rate of $7 per direct labor-hour. Loren is the department manager of the Makeup Department that produces Concealer (C) and Glow Cream (GC). Jennifer is the department manager of the Hair Care Department that manufactures Shampoo (S). The product costs (per case of 24 bottles) and other information are as follows: Products C GC S Direct materials $ 100.00 $ 72.00 $ 48.00 Direct labor 42.00 31.50 12.00 Overhead 28.00 21.00 14.00 $ 170.00 $ 124.50 $ 74.00 Machine-hours 4 2 3 Number of cases (per year) 300 500 600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Flawless Cosmetic Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating
Products | |||
---|---|---|---|
C | GC | S | |
Direct materials | $ 100.00 | $ 72.00 | $ 48.00 |
Direct labor | 42.00 | 31.50 | 12.00 |
Overhead | 28.00 | 21.00 | 14.00 |
$ 170.00 | $ 124.50 | $ 74.00 | |
Machine-hours | 4 | 2 | 3 |
Number of cases (per year) | 300 | 500 | 600 |
If Flawless changes its allocation basis to machine-hours, what is the total product cost per case for Product C?
Note: Do not round intermediate calculations.
Multiple Choice
-
$161.50
-
$169.30
-
$182.44
-
$183.36
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