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Ramona Diaz Ltd. produces two products, P1 and P2, at its two departments: Machining and Assembly, as shown in the table below. The accountant tries to allocate overhead costs to the two products.  If the accountant decides to allocate overhead based on machine hours, what is P2’s share of the total overhead costs?

Ramona Diaz Ltd. produces two products, P1 and P2, at its two departments: Machining and Assembly, as shown in the table below. The accountant tries to allocate overhead costs to the two products.  If the accountant decides to allocate overhead based on machine hours, what is P2’s share of the total overhead costs?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Ramona Diaz Ltd. produces two products, P1 and P2, at its two departments: Machining and Assembly, as shown in the table below. The accountant tries to allocate overhead costs to the two products. 

If the accountant decides to allocate overhead based on machine hours, what is P2’s share of the total overhead costs?

 
 
 
$180,000
 
 
 
$200,000
 
 
 
$220,000
 
 
 
$240,000
Machining Assembly Total P1 Overhead $300,000 1,200 machine hours 150,000 600 labor hours $450,000 P2 800 machine hours 900 labor hours Total 2,000 machine hours 1,500 labor hours
Transcribed Image Text:Machining Assembly Total P1 Overhead $300,000 1,200 machine hours 150,000 600 labor hours $450,000 P2 800 machine hours 900 labor hours Total 2,000 machine hours 1,500 labor hours
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