Brew Shack is a small brewery that is trying to better understand its costs. The company, which currently uses traditional job-order costing, allocates overhead costs using a single cost driver. The company is considering using two-stage allocation to assign overhead costs to batches of product. It gathers the following estimates: Budgeted MOH $ 48,000 Budgeted machine hours 20,000 Budgeted direct labor hours 5,000 Cost Pool Total Cost Allocation base Machine-related MOH $ 30,000 Machine hour Labor-related MOH $ 18,000 Direct labor hour Total $ 48,000 One batch of Pumpkin Moon Ale uses 4 machine hours and 1.5 direct labor hours. Assuming that Brew shack allocates manufacturing overhead costs on the basis of machine hours, what amount of overhead is allocated to a batch of Pumpkin Moon Ale?

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To allocate overhead costs using the twostage allocation method b... View the full answer