Question - Curly Manufacturing is estimating overhead of $600,000 for next year that is allocable to its deluxe and basic product lines. At the beginning of the year, they predicted the following activity levels of various potential cost drivers:
|
Deluxe
|
Basic
|
Total
|
|
Units produced
|
15,000
|
45,000
|
60,000
|
|
Machine hours
|
9,000
|
21,000
|
30,000
|
|
Material moves
|
2,000
|
2,000
|
4,000
|
|
Setups
|
600
|
400
|
1,000
|
1. How much overhead cost is expected to be allocated to the deluxe product line if machine hours is the chosen cost driver?
2. How much overhead cost is expected to be allocated to the basic product line if setups is the chosen cost driver?