Kevin grows Corn and Wheat in his farm. He needs to allocate his fixed manufacturing overhead costs
Fantastic news! We've Found the answer you've been seeking!
Question:
Kevin grows Corn and Wheat in his farm. He needs to allocate his fixed manufacturing overhead costs of $200,000 between these two products. Here is the information that he uses to allocate the overhead costs:
Corn | Wheat | |
Acres planted | 400 | 400 |
Yield (Bushels per acre) | 150 | 50 |
Kevin allocates 20% of the fixed manufacturing overhead using number of acres as cost allocation driver and the rest by using number of bushels produced. The amount of overhead allocated to Corn and Wheat equal:
Overhead allocated to Corn | Overhead allocated to Wheat | |
A | $100,000 | $100,000 |
B | $140,000 | $60,000 |
C | $150,000 | $50,000 |
D | $110,000 | $90,000 |
E | $50,000 | $150,000 |
Related Book For
Accounting What the Numbers Mean
ISBN: 978-0073527062
9th Edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
Posted Date: