Flawless 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 Products – Concealer (C) and Glow Cream (GC). Jennifer is the department manager of the Hair Care Department that manufactures Product – Shampoo (S). The product costs (per case of 24 bottles) and other information are as follows:
Products | |||||||||||
C | GC | S | |||||||||
Direct materials | $ | 95.00 | $ | 76.00 | $ | 48.00 | |||||
Direct labor | 44.00 | 34.50 | 10.00 | ||||||||
Overhead | 24.00 | 19.00 | 15.00 | ||||||||
$ | 163.00 | $ | 129.50 | $ | 73.00 | ||||||
Machine hours | 5 | 3 | 4 | ||||||||
Number of cases (per year) | 250 | 450 | 550 | ||||||||
If Flawless changes its allocation basis to machine hours, what is the total product cost per case for Product GC?
Answer:
Total Overhead = $24 x 250 + $19 x 450 + $15 x 550 = $22800
Total Machine hours = 5 x 250 + 3 x 450 + 4 x 550 = 4800
Overhead Rate = $22800 / 4800 = $4.75 per hour
Product cost per Case for Product GC = 76 + 34.50 + ( $4.75 X 3 ) = $124.75
Flawless Cosmetic Company manufactures and distributes several different products. The company currently uses a plantwide allocation...
Flawless 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 Products – Concealer (C) and Glow Cream (GC). Jennifer is the department manager of the Hair Care Department that manufactures Product – Shampoo (S). The product costs (per case of 24 bottles) and other information are as follows: Products C...
Flawless Cosmetic Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead at a rate of $6 per direct labor hour. Loren is the department manager of the Makeup Department which produces Products- Concealer (C) and Glow Cream (GC). Jennifer is the department manager of the Hair Care Department which manufactures Product Shampoo (S). The product costs (per case of 24 bottles) and other information are as follows: Products GC 115.00 $...
Flawless Cosmetic Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead at a rate of $5 per direct labor hour. Loren is the department manager of the Makeup Department which produces Products – Concealer (C) and Glow Cream (GC). Jennifer is the department manager of the Hair Care Department which manufactures Product – Shampoo (S). The product costs (per case of 24 bottles) and other information are as follows: Products C...
Flawless 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 Products - Concealer (C) and Glow Cream (GC). Jennifer is the department manager of the Hair Care Department that manufactures Product - Shampoo (S). The product costs (per case of 24 bottles) and other information are as follows: Products C...
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