Reference no: EM132810273

Yupick produces and sells 3 products, Iny, Miny, and Mo. The company manufacturing plant has practical capacity of 50,000 labour hours. Fixed cost of support departments total $180,000 and need to be allocated to operating departments. At the start of the production period, line managers budgetted 6,00 labour hours to produce Iny, 11,000 labour hours to produce Miny, and 13,000 labour hours to produce Mo. Budgetted varaiable cost per hour were foreacsted at $5 per labour hour used.

At the end of the period, actual labour hours were tallied an Iny required 7,500 labour hours, Miny required 11,500 hours and MO required 21,000 hours.

Problem 1: Using a single-rate cost allocation, what allocation rate would be applied at the start of the production period?