Main Street Ice Cream Company uses a plantwide allocation method to allocate overhead based on direct labor-hours at a rate of $2 per labor-hour. Strawberry and vanilla flavors are produced in Department SV. Chocolate is produced in Department C. Sven manages Department SV and Charlene manages Department C. The product costs (per thousand gallons) follow:

	Strawberry			Vanilla			Chocolate
Direct labor (per 1,000 gallons)	$	761		$	836		$	1,136
Raw materials (per 1,000 gallons)		811			511			611

Requirement 1:

If the number of hours of labor per 1,000 gallons is 50 for strawberry, 55 for vanilla, and 75 for chocolate, compute the total cost of 1,000 gallons of each flavor using plantwide allocation. (Omit the "$" sign in your response.)

	Total cost
Strawberry	$ 1,702
Vanilla	$1,497
Chocolate	$1,957

Requirement 2:

Charlene's department uses older, outdated machines. She believes that her department is being allocated some of the overhead of Department SV, which recently bought state-of-the-art machines. After she requested that overhead costs be broken down by department, the following information was discovered:

	Department SV			Department C
Overhead	$	88,760		$	915
Machine-hours		25,360			37,600
Labor-hours		25,360			18,300

Using machine-hours as the department allocation base for Department SV and labor-hours as the department allocation base for Department C, compute the allocation rate for each. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

	Allocation rate
Department SV	$  3.50
Department C	$ 0.05

Requirement 3:

Compute the cost of 1,000 gallons of each flavor of ice cream using the department allocation rates computed in requirement 2 if the number of machine-hours for 1,000 gallons of each of the three flavors of ice cream are as follows: strawberry, 60; vanilla, 70; and chocolate, 166. Direct labor hours by product remain the same as in requirement 1. (Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

	Total cost
Strawberry	$
Vanilla	$
Chocolate	$

Requirement 4:
(a)	Was Charlene correct in her belief?
	(Click to select)Yes No

(b)	Department allocation generally yields more accurate product cost information.
	(Click to select)False True

Answer rating: 100% (QA)

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