Exercise 4-5A Allocating overhead cost among products LO 4-3 Baird Hats Corporat
ID: 2514218 • Letter: E
Question
Exercise 4-5A Allocating overhead cost among products LO 4-3 Baird Hats Corporation manufactures three different models of hats: Vogue, Beauty, and Glamour Baird expects to incur $280,000 of overhead cost during the next fiscal year, Other budget information follows: Direct laber hour Machine hours 2,200 4,2007,600 14,000 1,300 ,400.300 4,000 Required a. Use direct labor hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product b. Use machine hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product. Complete this question by entering your answers in the tabs below Required A Required & Use direct labor hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each Allocation Rate x Weight of Base AllocatedExplanation / Answer
a) Allocation rate = 280,000 / 14,000 hours = 20 per DLH
Vogue = 2200 X 20 = $44,000
Beauty = 4200 X 20 = 84,000
Glamour = 7600 X 20 = 152,000
Total = 280,000
b)
Allocation rate = 280,000 / 4000 MH =$70 MH
Vogue = 1300 X 70 = 91,000
Beauty = 1400 X 70 = 98,000
Glamour =1300 X 70 = 91,000
Total 280,000
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