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Questions 3, 4 and 5 are based on the following information:

Question 3 X Company produces many different products within the same manufacturing plant. It currently uses a single driver, plantwide allocation system to allocate its overhead, with direct labor hours as the most appropriate cost driver. Estimated direct labor hours for 2015 are 110,000; estimated overhead is $188,000.

Assume the following information for one of its products, Product 1, in 2015:

Direct materials	$64,500
Direct labor	$14,070
Direct labor hours	938
Machine hours	1,900

3. Using the single driver system, allocate overhead to Product 1 (round overhead rate(s) to two decimal places).

Question 4 Assume that X Company has decided to switch to a departmental allocation system. It has two departments, and will use direct labor hours as the cost driver in Department 1 and machine hours as the cost driver in Department 2. The following are budgeted costs and driver amounts for these two departments in 2015:

	Department 1	Department 2
Overhead	$110,000	$78,000
Direct labor	$900,000	$750,000
Direct labor hours	60,000	50,000
Machine hours	120,000	120,000

Assume the following information for Product 1 in 2015:

	Department 1	Department 2
Direct labor	$11,775	$2,295
Direct labor hours	785	153
Machine hours	1,080	820

4. Using the departmental system, allocate overhead to Product 1 (round overhead rate(s) to two decimal places).

Activity	Budgeted cost	Cost driver
Purchasing	$37,600	4,600 purchase orders
Assembly	$94,000	88,800 parts
Packaging	$56,400	14,400 finished units

Question 5 Assume that X Company has decided to switch to an activity-based costing allocation system. It has identified three activities with the following budgeted costs and cost drivers for 2015:

5. Assume that 594 unis of Product 1 were finished in 2015, requiring 1,434 parts and 33 purchase orders. Using the activity-based costing system, allocate overhead to Product 1 (round overhead rate(s) to two decimal places).

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