JennerMaid Company manufactures and distributes several different products.The company currently uses a plantwide allocation method for allocating overhead at a rate of $20 per direct labor hour.Department 1 produces Product X.Department 1 has $256,000 in traceable overhead.Department 2 manufactures Products Y and Z.Department 2 has $524,000 in traceable overhead.The product costs (per unit)and other information are as follows:

Required:
a.If JennerMaid changes its allocation basis to machine hours,what is the overhead cost per unit for Product X,Y,and Z?
b.If JennerMaid changes its overhead allocation to departmental rates,what are the overhead costs per unit for Product X,Y,and Z,assuming Department 1 uses direct labor hours and Department 2 uses machine hours as their respective allocation bases?

Question

JennerMaid Company manufactures and distributes several different products.The company currently uses a plantwide allocation method for allocating overhead at a rate of $20 per direct labor hour.Department 1 produces Product X.Department 1 has $256,000 in traceable overhead.Department 2 manufactures Products Y and Z.Department 2 has $524,000 in traceable overhead.The product costs (per unit)and other information are as follows:

Required:
a.If JennerMaid changes its allocation basis to machine hours,what is the overhead cost per unit for Product X,Y,and Z?
b.If JennerMaid changes its overhead allocation to departmental rates,what are the overhead costs per unit for Product X,Y,and Z,assuming Department 1 uses direct labor hours and Department 2 uses machine hours as their respective allocation bases?

Quizplus · Accepted Answer

The Answer of JennerMaid Company manufactures and distributes several different products.The company currently uses a plantwide allocation method for allocating overhead at a rate of $20 per direct labor hour.Department 1 produces Product X.Department 1 has $256,000 in traceable overhead.Department 2 manufactures Products Y and Z.Department 2 has $524,000 in traceable overhead.The product costs (per unit)and other information are as follows:

Required:
a.If JennerMaid changes its allocation basis to machine hours,what is the overhead cost per unit for Product X,Y,and Z?
b.If JennerMaid changes its overhead allocation to departmental rates,what are the overhead costs per unit for Product X,Y,and Z,assuming Department 1 uses direct labor hours and Department 2 uses machine hours as their respective allocation bases?

JennerMaid Company Manufactures and Distributes Several Different Products