Smelly perfume company manufactures and distributes several

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Smelly Perfume Company manufactures and distributes several different products. They currently use a plant-wide allocation method for allocating overhead at a rate of $7 per direct labor hour. Cindy is the department manager of Department C which produces Products J and P. Diane is the department manager of Department D which manufactures Product X. The product costs (per case of 24 bottles) and other information are as follows:

J P X Direct materials $100.00 $ 72.00 $48.00 Direct labor 42.00 31.50 12.00 Overhead 28.00 21.00 14.00 $170.00 $124.50 $74.00 Machine hours 4 2 3 Number of cases (per year) 300 500 600 If Smelly changes its allocation basis to machine hours, what is the total product cost per case for Product P? a. $163.50 b. $144.00 c. $138.15 d. $117.15

Reference no: EM13480513

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