Question

Jordan Company makes three products in its factory: plastic cups, plastic tablecloths, and plastic bottles. The expected overhead costs for the next fiscal year include the following: Factory manager's salary Factory utility cost Factory supplies Total overhead costs $ 233,300 78,000 27,000 $ 338,300 Jordan uses machine hours as the cost driver to allocate overhead costs. Budgeted machine hours for the products are as follows: 290 Hours 725 Cups Tablecloths Bottles Total machine hours 975 1,990 Required a. Allocate the budgeted overhead costs to the products. Allocation Rate x Weight of Base = Allocated Cost Product Cups Tablecloths

Answer 1

Total overhead	338300
Divide by Total machine hours	1990
Allocation rate	170
Product	Allocation rate	X	Weight of Base	=	Allocated Cost
Cups	170	X	290	=	49300
Tablecloths	170	X	725	=	123250
Bottles	170	X	975	=	165750
Total					338300