What is the overhead rate per machine hour

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Reference no: EM132655838

Flawless Cosmetic Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead at a rate of $5 per direct labor hour. Loren is the department manager of the Makeup Department that produces Products - Concealer (C) and Glow Cream (GC). Jennifer is the department manager of the Hair Care Department that manufactures Product - Shampoo (S).

The product costs (per case of 24 bottles) and other information are as follows:

 

 

Products

 

C

GC

5

Direct materials

$100.00

$ 78.00

$50.00

Direct labor

48.00

30.50

14.00

Overhead

30.00

24.00

16.00

 

$178.00

$132.50

$80.00

Machine hours

4

2

3

Number of cases (per year)

300

500

600


Problem 1:
Based on this information, if Flawless changes its allocation basis to machine hours, what is the overhead rate per machine hour?

Reference no: EM132655838

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