Main Street Ice Cream Company uses a plantwide allocation method

to allocate overhead based on direct labor-hours at a rate of $2

per labor-hour. Strawberry and vanilla flavors are produced in

Department SV. Chocolate is produced in Department C. Sven manages

Department SV and Charlene manages Department C. The product costs

(per thousand gallons) follow:

Strawberry

Vanilla

Chocolate

1,000 gallons)

1,000 gallons)

1:

If the number of hours of labor per 1,000 gallons is 60 for

strawberry, 70 for vanilla, and 100 for chocolate, compute the

total cost of 1,000 gallons of each flavor using plantwide

allocation. (Omit the "$" sign in your

response.)

cost

1,702   

$1,497    

$1,957    

2:

Charlene's department uses older, outdated machines. She

believes that her department is being allocated some of the

overhead of Department SV, which recently bought state-of-the-art

machines. After she requested that overhead costs be broken down by

department, the following information was discovered:

Department SV

Department C

Using machine-hours as the department allocation base for

Department SV and labor-hours as the department allocation base for

Department C, compute the allocation rate for each. (Round

your answers to 2 decimal places. Omit the "$" sign in your

response.)

rate

$  3.50    

3:

Compute the cost of 1,000 gallons of each flavor of ice cream

using the department allocation rates computed in requirement 2 if

the number of machine-hours for 1,000 gallons of each of the three

flavors of ice cream are as follows: strawberry, 60; vanilla, 70;

and chocolate, 166. Direct labor hours by product remain the same

as in requirement 1. (Round your intermediate calculations

and final answers to the nearest dollar amount. Omit the "$" sign

in your response.)

cost

$    

$    

$    

4:

belief?

yields more accurate product cost information.