Hardball machine make up the entire product line

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In the last section of the report, the management team would like to know the profits they can expect from the two models of pitching machines they currently manufacture. The softball pitching machine and the hardball machine make up the entire product line. To help determine the profit of each individual product, the CFO wants overheads to be allocated back to the products. Total inspection costs are $40,000. The estimated production budget is as follows. Softball pitching machine Units 20 units Direct labor hours per unit 200 hours per unit Number of inspections 5 per unit Hardball pitching machine Units 20 units Direct labor hours per unit 200 hours per unit Number of inspections 15 per unit 1. Under a costing system that uses direct labor hours as a driver for the allocation, how much of the inspection costs would be allocated to softball machine? 2. Repeat the same question for hardball machine. 3. Using ABC and the number of inspections as a driver for allocation, recalculate the allocation for the softball machine. 4. Repeat the activity mentioned in question 3 for hardball machine.

Reference no: EM132181225

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