Exercise 12 4 Allocating overhead costs among products [LO 3, 4]
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Nevin Company makes three products in its factory: plastic cups, plastic tablecloths, and plastic bottles. The expected overhead costs for the next fiscal year include the following. |
| Factory manager’s salary | $ | 130,000 | |
| Factory utility costs | 65,000 | ||
| Factory supplies | 25,000 | ||
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| Total overhead costs | $ | 220,000 | |
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Nevin uses machine hours as the cost driver to allocate overhead costs. Budgeted machine hours for the products are as follows. |
| Cups | 400 | hours |
| Tablecloths | 700 | |
| Bottles | 1,100 | |
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| Total machine hours | 2,200 | |
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| Required: |
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Allocate the budgeted overhead costs to the products. (Round your answers to the nearest dollar amount. Omit the “$” sign in your response.) |
| Product | Allocated Cost |
| Cups | $ |
| Tablecloths | |
| Bottles | |
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| Total | $ |
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