Bugaboo Co. manufactures three types of cookies: Fluffs, Crinkles, and Snaps. The production process is relatively simple, and factory overhead costs are allocated to products using a single plantwide factory overhead rate based on direct labor hours. Information for the month of May, Bugaboo's first month of operations, follows: 
Bugaboo has budgeted direct labor costs for May at $8.50 per hour. Budgeted direct materials costs for May are: Fluffs, $0.75/unit; Crinkles $0.40/unit; and Snaps $0.30/unit.Bugaboo's budgeted overhead costs for May are: 
a.Compute Bugaboo's plantwide factory overhead rate for May.
b.Compute the product cost in May for each type of cookie.
c.Does Bugaboo's use of a plantwide factory overhead rate in any way distort the product costs for May?
Definitions:
Reduced Pension
A retirement plan that provides beneficiaries with lower benefits than originally anticipated or agreed upon.
Contributory Pension Plans
Retirement plans where both the employer and employees contribute to the fund that will be used to provide retirement benefits to the employees.
Contributions
The act of giving or adding to something larger, often refers to financial contributions in a business or investment context but can also apply to contributions of time, effort, or resources.
Household Income
The combined gross income of all members of a household who are 15 years old and higher, regardless of their relationship.
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