I will leave a thumbs up for a good explanation on both questions, thanks! X Com
ID: 2424762 • Letter: I
Question
I will leave a thumbs up for a good explanation on both questions, thanks!
X Company has two production departments, X and Y. Listed below are budgeted information for the two departments, and actual information for one of its products, Product 1: 3. Using a plantwide allocation system with machine hours as the cost driver, what was the allocation to Product 1 [round overhead rates to the nearest cent]? 4. Using a departmental allocation system with direct labor hours as the cost driver in Department X and machine hours as the cost driver in Department Y, what was the allocation to Product 1 [round overhead rates to the nearest cent.Explanation / Answer
1)Plantwide allocation system = (6,800,000+2,100,000)/ (110,000+120,000) = $39
Allocated $39 * (1100+890) = $77,160
Department X = 6,800,000/40,000 = 170 *799 = $135,830
Department Y = 2,100,000/120,000 = $18 *890 = 16,020
Total alocated = $151,850
1)Plantwide allocation system = (6,800,000+2,100,000)/ (110,000+120,000) = $39
Allocated $39 * (1100+890) = $77,160
Department X = 6,800,000/40,000 = 170 *799 = $135,830
Department Y = 2,100,000/120,000 = $18 *890 = 16,020
Total alocated = $151,850