Question: Allocate overhead costs using direct labor hours and machine hours. Department Overhead Costs ($) Direct Labor Hours Machine Hours Department X $150,000 12,000 hours 6,000

Allocate overhead costs using direct labor hours and machine hours.

Department

Overhead Costs ($)

Direct Labor Hours

Machine Hours

Department X

$150,000

12,000 hours

6,000 hours

Department Y

$200,000

15,000 hours

7,500 hours

Requirements:

Allocate overhead costs to Department X and Department Y using direct labor hours.

Allocate overhead costs to Department X and Department Y using machine hours.

Discuss the differences in allocation methods and their impact on cost management and decision-making.

Recommend a more accurate method for overhead allocation in this manufacturing context.

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