Question

Tyson Hats Corporation manufactures three different models of hats: Vogue, Beauty, and Glamour. Tyson expects to incur $550,000 of overhead cost during the next fiscal year. Other budget information follows: Vogue Beauty Glamour Total Direct labor hours 6,000 8,000 11,000 25,000 Machine hours 1,100 1,400 3,000 5,500 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. Allocation Rate x Weight of Base = Allocated Cost $ 5,833 x = $ Product Vogue Beauty Glamour Total

Answer 1

direct labour hours as cost driver allocation base =total overhead cost /Total Direct labor hours =550,000/25000 a) ANSWER allocation ratex х product vogue beauty glamour total weight of base = allocated cost 6000 132000 8000 176000 11000 242000 550000 22 machine hours as cost driver 100 allocation base total overhead cost/Total machine hours =550000/5500 b) ANSWER product allocation ratex weight of base = vogue 100 1100 beauty 100 x 1400 glamour 100 x 3000 total allocated cost 110000 140000 300000 550000