Answer Happy

Main Street Ice Cream Company uses a plantwide allocation method to allocate overhead based on direct labor-hours at a rate of $2 per labor-hour. Strawberry and vanilla flavors are produced in Department SV. Chocolate is produced in Department C. Sven manages Department SV and Charlene manages Department C. The product costs (per thousand gallons) follow. Direct labor (per 1,000 gallons) Raw materials (per 1,000 gallons) Overhead Required: a. If the number of hours of labor per 1,000 gallons is 56 for strawberry, 66 for vanilla, and 100 for chocolate, compute the total cost of 1,000 gallons of each flavor using plantwide allocation. b. Charlene's department uses older, outdated machines. She believes that her department is being allocated some of the overhead of Department SV, which recently bought state-of-the-art machines. After she requested that overhead costs be broken down by department, the following information was discovered: Machine-hours Labor-hours Strawberry Vanilla $755 $ 830 805 505 Department SV Department C $14,274 36,500 18,300 $75,750 25,250 25,250 Chocolate $1,130 605 Using machine-hours as the department allocation base for Department SV and labor-hours as the department allocation base for Department C, compute the allocation rate for each. c. Compute the cost of 1,000 gallons of each flavor of ice cream using the department allocation rates computed in requirement (b) if the number of machine-hours for 1,000 gallons of each of the three flavors of ice cream are as follows: strawberry, 56; vanilla, 66; and chocolate, 155. Direct labor-hours by product remain the same as in requirement (a).
Required A Required B Required C If the number of hours of labor per 1,000 gallons is 56 for strawberry, 66 for vanilla, and 100 for chocolate, compute the total cost of 1,000 gallons of each flavor using plantwide allocation. Strawberry Vanilla Chocolate Total Cost
Required A Required B Required C Using machine-hours as the department allocation base for Department SV and labor-hours as the department allocation base for Department C, compute the allocation rate for each. (Round your answers to 2 decimal places.) Department SV Department C Allocation Rate per machine hour per labor hour
Required A Required B Required C Compute the cost of 1,000 gallons of each flavor of ice cream using the department allocation rates computed in requirement (b) if the number of machine-hours for 1,000 gallons of each of the three flavors of ice cream are as follows: strawberry, 56; vanilla, 66; and chocolate, 155. Direct labor-hours by product remain the same as in requirement (a). Strawberry Vanilla Chocolate Total Cost