Chapter C, Problem 1E

To determine

Concept Introduction:

Manufacturing overhead allocation:

Manufacturing overhead cost is the pool of all indirect costs incurred for the production. These are the costs which are not directly traceable to the product. Manufacturing costs include indirect material indirect labor and overheads. These costs are allocated to the products using the overhead allocation rate. The formula for overhead allocation rate is as follows:

$\text{Overhead allocation rate = }\frac{\text{Estimated Manufacturing overhead Cost}}{\text{Allocation base}}$

Requirement-1:

To determine: The overhead cost per unit for each product line

To determine

Requirement-2:

To determine: The Total cost per unit for each product line

To determine

Requirement-3:

To determine: The Profit or Loss per unit for each product line