Blalock Company manufactures and distributes several different products.The company currently uses a plantwide allocation method for allocating overhead at a rate of $10 per direct labor hour.Department A produces Products #101X and #102Y.Department A has $262,000 in traceable overhead.Department B manufactures Product #103Z.Department B has $128,000 in traceable overhead.The product costs (per unit)and other information are as follows:

Required:
a.If Blalock changes its allocation basis to machine hours,what is the total product cost per unit for Product 101X,102Y,and 103Z?
b.If Blalock changes its overhead allocation to departmental rates,what are the product costs per unit for Product 101X,102Y,and 103Z,assuming Departments A and B use direct labor hours and machine hours as their respective allocation bases?

Question

Blalock Company manufactures and distributes several different products.The company currently uses a plantwide allocation method for allocating overhead at a rate of $10 per direct labor hour.Department A produces Products #101X and #102Y.Department A has $262,000 in traceable overhead.Department B manufactures Product #103Z.Department B has $128,000 in traceable overhead.The product costs (per unit)and other information are as follows:

Required:
a.If Blalock changes its allocation basis to machine hours,what is the total product cost per unit for Product 101X,102Y,and 103Z?
b.If Blalock changes its overhead allocation to departmental rates,what are the product costs per unit for Product 101X,102Y,and 103Z,assuming Departments A and B use direct labor hours and machine hours as their respective allocation bases?

Quizplus · Accepted Answer

The Answer of Blalock Company manufactures and distributes several different products.The company currently uses a plantwide allocation method for allocating overhead at a rate of $10 per direct labor hour.Department A produces Products #101X and #102Y.Department A has $262,000 in traceable overhead.Department B manufactures Product #103Z.Department B has $128,000 in traceable overhead.The product costs (per unit)and other information are as follows:

Required:
a.If Blalock changes its allocation basis to machine hours,what is the total product cost per unit for Product 101X,102Y,and 103Z?
b.If Blalock changes its overhead allocation to departmental rates,what are the product costs per unit for Product 101X,102Y,and 103Z,assuming Departments A and B use direct labor hours and machine hours as their respective allocation bases?

Blalock Company Manufactures and Distributes Several Different Products