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A dairy allocates the cost of unprocessed milk to the production of milk, cream, butter and cheese. For the current period, unprocessed milk was purchased for $240,000, and thefollowing quantities of product and sales revenues wereproduced.
Product pounds price per pound milk 100,000 $.90 cheese 50,000 2.20 butter 20,000 1.00 Cream 10,000 3.00 How much of the $240,000 cost should be allocated to milk?
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V Company's product has a labor standard of 2 hours per unit. For 2011, it estimates its production will be 200,000 units (400,000 DLHs). It budgets total overhead at $900,000, which results in a fixed overhead rate of $1.50 per hour.
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A special order to purchase 10,000 units was recently received. Kandeed has enough capacity to fill the order, and filling the order would not disrupt current production or sales of K.
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