MC Qu. 27 Sheddon Industries produces two products. Th... Sheddon Industries pro

Question

MC Qu. 27 Sheddon Industries produces two products. Th... Sheddon Industries produces two products. The products' identified costs are as follows Product A $20,000 12,000 Product E Direct materials Direct labor The company's overhead costs of $108,000 are allocated based on labor cost. Assume 4,000 units of product A and 5,000 units of Product B are produced. What amount of production costs would be assigned to Product A? (Do not round your intermediate calculations) O $36,000 Os11000 O $68,000 None of these answers is correct

Explanation / Answer

Solution: 68,000

Working:

Overhead Allocation rate = 108,000 / 36,000 = 3

Product A = 3 * 12000 = 36,000

Total product cost = 20,000 + 12,000 + 36,000 = 68,000

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