Airborne Industries Uses a Two-Stage Allocation Method to Assign Costs

Essay

Airborne Industries uses a two-stage allocation method to assign costs to its products. The following information has been provided for the month:

Required:
(a) Allocate the manufacturing overhead to two cost pools: machine-related and labor-related.
(b) Compute the predetermined overhead rate for the two pools, using machine hours and direct labor cost as the bases.
(c) Compute the unit cost of production for each of the three products.