Flawless Cosmetic Company Manufactures and Distributes Several Different Products

Multiple Choice

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:

Based on this information,if Flawless changes its allocation basis to machine hours,what is the overhead rate per machine hour?

A) $3.00
B) $2.00
C) $21.00
D) $6.825