Smelly Perfume Company Manufactures and Distributes Several Different Products

question 31

Multiple Choice

Smelly Perfume Company manufactures and distributes several different products.The company currently uses a plantwide 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.Department C has $16,200 in traceable overhead.Diane is the department manager of Department D which manufactures Product X.Department D has $11,100 in traceable overhead.The product costs (per case of 24 bottles) and other information are as follows: If Smelly changes its overhead allocation to departmental rates,what is the product cost per case for Product X assuming Departments C and D use direct labor hours and machine hours as their respective allocation bases?

• A)$79.50.
• B)$80.48.
• C)$74.00.
• D)$78.50.

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Definitions:

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