Flawless Cosmetic Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead
at a rate of $7 per direct labor hour. Loren is the department manager of the Makeup Department which produces Products – Concealer (C) and Glow Cream (GC). Jennifer is the department manager of the Hair Care Department which manufactures Product – Shampoo (S). The product costs (per case of 24 bottles) and other information are as follows:
C GC S
Direct materials $100.00 $ 72.00 $ 48.00
Direct labor 42.00 31.50 12.00
Overhead 28.00 21.00 14.00
$ 170.00 $124.50 $ 74.00
Machine hours 4 2 3
Number of cases (per year) 300 500 600
If Flawless changes its allocation basis to machine hours, what is the total product cost per case for Product GC?
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