Rawlings Corp. has two product lines, A and B. Rawlings has identified the following information about its overhead and potential cost drivers.

Rawlings Corp. has two product lines, A and B. Rawlings has identified the following information about its overhead and potential cost drivers.

 

Total overhead	$80,000
Cost drivers
Number of labor hours	2,700
Number of machine hours	50,000

 

Requirement 1:

Suppose the Rawlings Corp. uses a traditional costing system with number of labor hours as the cost driver. Determine the amount of overhead assigned to each product line if Product A requires 62% of the labor hours and Product B requires 38%. (Round your answers to the nearest dollar amount. Omit the "$" sign in your response.)

 

	Overhead assigned
Product A	$ 49,600
Product B	$ 30,400

 

Requirement 2:

Suppose Rawlings uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line if Product A consumes 17,700 machine hours and Product B consumes 32,300. (Round intermediate calculations to 2 decimal places and your final answers to the nearest whole dollar amount. Omit the "$" sign in your response.)

 

	Overhead assigned
Product A	$ 28,320
Product B	$ 51,680

Explanation:

1:

Product A:  $80,000 × 62% = $49,600

Product B:  $80,000 × 38% = $30,400

2:

$80,000 / 50,000 Machine Hrs = $1.6 per machine hr.

Product A:  17,700 × $1.6 = $28,320

Product B:  32,300 × $1.6 = $51,680