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    Editte's Avatar
    Editte Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Mar 21, 2007, 01:04 PM
    Allocating Indirect Manufacturing Overhead Costs
    Hans Sorensen, controller of Franklin Production, has the choice of allocating indirect manufacturing cost using either
    Direct manufacturing labour hours or manufacturing machine hours. If he uses labour hours for the month of January,
    Product A receives $312,000 in manufacturing overhead charges and Product B receives $448,000. When machine
    Hours are used Product A receives $352,000 in manufacturing overhead charges while Product B receives only
    $408,000.
    Required:
    You are the department manager in charge of Product A and are strongly in favour of using labour hours. Of course,
    Your co-manager, who is in charge of Product B, is strongly in favour of machine hours. What are some arguments you
    May be able to give for the allocation base that favours your department's product?
    masud's Avatar
    masud Posts: 26, Reputation: 2
    New Member
    		  
    #2

    Apr 22, 2007, 03:47 PM
    Because we r cost saving that's why I would recommend
    Labour Hours for Product A
    Machine Hours for Product B
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