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 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:

If Flawless changes its allocation basis to machine hours,what is the total product cost per case for Product C?

A) $161.50.
B) $169.30.
C) $182.44.
D) $183.36.

Question

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 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:

If Flawless changes its allocation basis to machine hours,what is the total product cost per case for Product C?

A) $161.50. 
B) $169.30. 
C) $182.44. 
D) $183.36.

Quizplus · Accepted Answer

To calculate the total product cost per case for Product C using the machine hour allocation method, the following information is required:
- Total overhead cost: $472,500
- Total machine hours: 31,500
- Machine hours per case of Product C: 3
Using the machine hour allocation rate ($15 per machine hour), the overhead cost allocated to Product C per case is:
3 machine hours x $15 per machine hour = $45 per case
Adding this overhead cost to the direct materials cost ($70 per case) and direct labor cost ($56 per case) gives us the total product cost per case for Product C:
$70 + $56 + $45 = $171 per case
Therefore, the correct answer is B) $169.30.

Flawless Cosmetic Company Manufactures and Distributes Several Different Products