Question

Mars Bar Company produces two products, Milky Way and Snickers. The indirect labor costs include the following two items:

Plant supervision	$   700,000
Setup labor (indirect)	300,000
Total indirect labor	$1,000,000

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The following activity-base usage and unit production information is available for the two products:

	Number of Setups	Direct Labor Hours	​ Units
Product Milky Way	200	20,000	900
Product Snickers	200	30,000	1,100
Totals	400	50,000	2,000

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a.	Determine the single plantwide factory overhead rate, using direct labor hours as the activity base. $
b.	Determine the factory overhead allocated per unit for Products Milky Way and Snickers, using the single plantwide factory overhead rate.  (round to two decimal places) Milky Way $ Snickers $
c.	Determine the activity rate for plant supervision and setup labor, assuming that the activity base for supervision is direct labor hours and the activity base for setup labor is number of setups. Setup Activity Rate $  per setup Supervision Activity Rate $  per dlh
d.	Determine the factory overhead allocated per unit for Products T and U, using the activity-based costing method.  (Round your answers to two decimal places) Milky Way $ Snickers $

Answer 1