JennerMaid Company Manufactures and Distributes Several Different Products Required:
A

question 59

Essay

JennerMaid Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead at a rate of $20 per direct labor hour. Department 1 produces Product X and has $256,000 in traceable overhead. Department 2 manufactures Products Y and Z and has $524,000 in traceable overhead. The product costs (per unit) and other information are as follows:
$\begin{array}{lccc}&&\text { Products }\\& \mathrm{X} & \mathrm{Y} & \mathrm{Z}\\ \text { Direct materials } & \$ 85.00 & \$ 74.00& \$ 66.00 \\ \text { Direct labor } & 42.00 & 31.50 & 22.00 \\ \text { Overhead } & 40.00 & 30.00 & 20.00 \\& \$ 167.00 & \$ 135.50& \$ 108.00\\\text { Machine hours (per unit) } & 4 & 2 & 3 \\\text { Number of cases (per year) } & 6,000 &10,000&12,000\end{array}$

Required:
a. If JennerMaid changes its allocation basis to machine hours, what is the overhead cost per unit for Product X, Y, and Z?
b. If JennerMaid changes its overhead allocation to departmental rates, what is the overhead cost per unit for Product X, Y, and Z, assuming Department 1 uses direct labor hours and Department 2 uses machine hours as their respective allocation bases? (round to four decimal places)

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Definitions:

Thalamus

A part of the brain that acts as a principal relay station for sensory information, directing it to appropriate areas of the brain for processing.

Physiological Explanation

An interpretation of a phenomenon or behavior by relating it to physiological processes and biological functions.

Cognition

The cognitive process of gaining awareness and comprehension via thinking, experiencing, and sensory perception.

Nucleus Accumbens

A region in the brain involved in the reward circuit, associated with pleasure, reinforcement learning, addiction, and fear.