Advantage inc produces two products a and b last year the

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Reference no: EM13583320

Advantage Inc. produces two products A and B. Last year the overhead costs were allocated based on machine hours. This year they are considering ABC.

Cost Pool

Driver and Level

Cost in Pool

A

B

Allocation Base

Supervisors Salaries

   120,000

Direct labor hours

$240,000

        80,000

   40,000

$2.00

per DL hour

Quality Control

        1,500

inspections

$150,000

             900

        600

$100.00

per inspection

Machining

   100,000

machine hours

$600,000

        80,000

   20,000

$6.00

per machine hr.

Production in units


        20,000

     5,000



Total overhead costs

$990,000





a.If overhead is allocated using the traditional method of direct labor hours what is the overhead cost per direct labor hour?

b.Under the traditional method what is the overhead cost per unit for A's?   

c.Under the traditional method what is the overhead cost per unit for B's?

Reference no: EM13583320

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