Cost Allocation of a Product with Machine Hours as the Cost Driver


X Company has two production departments, X and Y. Listed below are budgeted information for the two departments, and actual information for one of its products, product 1:

Department X                         All Products                  Product 1

                         Overhead                                 $7,200,000                          -

                        Direct labor                                 $800, 000                       $13,776

                              Direct labor hours                           50,000                           861

                              Machine hours                               120,000                          1040

                              Units produced                              53,000                            590

                            Department Y  

                              Overhead                                 $1,900,000                          -

                        Direct labor                                 $640, 000                       $2,000

                              Direct labor hours                           40,000                          125

                              Machine hours                              140,000                          810

                              Units produced                              50,000                            590

Using a plant wide allocation system with machine hours as the cost driver in department X and direct labor hours as cost driver in department Y. what was the allocation to product 1.

Summary: This question belongs to accounting and discusses about budgeted information and to calculate cost allocation for a product.

Total word count: 20


Download Full Solution


  • HWA

    this is a very good website

  • HWA

    I have 50 questions for the same test your page is showing only 28

  • HWA

    hi can you please help or guide me to answer my assignments. thanks

  • HWA

    hi can anyone help or guide me to my assignments. thanks

  • HWA

  • HWA

    This solution is perfect ...thanks

  • HWA

    Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes

  • HWA

    Perfect bank of solution. 

  • HWA

    great !

  • HWA
    Paul Brandon-Fritzius

    thanks for the quick response. the solution looks good. :)

  • HWA
    tina Johnson

    thnx for the answer. it was perfect. just the way i wanted it. 

  • HWA

    works fine.