Determine how much overhead is allocated to alpha

Reference no: EM131920698

Problem

Auburn, Inc.‘s overhead costs of $700,000 consist of machining $400,000; inspecting $200,000; and packaging $100,000. Machining works 4,000 hours a year, 500 inspections occur each year, and 1,000 packing orders occur each year. Information on the company's two products are as follows:

	Alpha	Omega
Machining hours	1,000	3,000
Inspections	100	400
Packing orders	350	650
Direct labor hours	1,700	1,800

Determine how much overhead is allocated to Alpha assuming the use of a single overhead rate (based on direct labor hours) and assuming the use of ABC, respectively.

Reference no: EM131920698

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