Question: Flawless Cosmetic Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead at a rate of $6
Flawless Cosmetic Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead at a rate of $6 per direct labor hour. Loren is the department manager of the Makeup Department which produces Products – Concealer (C) and Glow Cream (GC). Jennifer is the department manager of the Hair Care Department which manufactures Product – Shampoo (S). The product costs (per case of 24 bottles) and other information are as follows:
| Products | |||||||||
| C | GC | S | |||||||
| Direct materials | $ | 90.00 | $ | 80.00 | $ | 42.00 | |||
| Direct labor | 50.00 | 30.00 | 15.00 | ||||||
| Overhead | 20.00 | 25.00 | 17.00 | ||||||
| $ | 160.00 | $ | 135.00 | $ | 74.00 | ||||
| Machine hours | 5 | 3 | 4 | ||||||
| Number of cases (per year) | 350 | 550 | 650 | ||||||
If Flawless changes its allocation basis to machine-hours, what is the total product cost per case for Product GC?
A). $166.80
B). $156.20
C). $150.90
D). $125.90
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