[stanley65]

Nevin company makes three products in it's factory: plastic cups, tablecloths, and plastic bottles. The exspected overhead cost for the next fisical year include the following, Factory managers salary $260,000, factory utilities cost 121,000, factory supplies 56 ,000. Nevin uses machine hours as the cost driver to allocate overhead cost. Budgeted machine hours for the products are as follows. Cups 420 hour, tablecloths 740, bottles 1,140,total machine hours 2,300. Allocate the budget overhead cost to the products. Provide a possible explanation as to why Nevin chose machine hours instead of labor hours as the allocation base.