Pheonix Adventure Company makes two types of camping tents. Making a standard camping tent requires 4 hours of labor while making a deluxe camping tent requires 10 hours of labor. During the most recent accounting period the company made 2,000 standard camping tents and 500 deluxe camping tents. Indirect manufacturing costs amounted to 552,000 and are allocated based on labor hours. Based on this information: A. $4 of overhead cost should be allocated to each camping tent regardless of the type of tent made. B. S20.80 of overhead cost should be allocated to each camping tent regardless of the type of tent made. C. $16 of overhead cost should be assigned to each standard camping tent and $40 of overhead cost should be assigned to each deluxe tent. D. None of these answers is correct. Herald Manufacturing Company uses a predetermined overhead rate to allocate fixed manufacturing overhead to production on a monthly basis. At the end of the accounting period it was determined that actual overhead cost was less than the estimated overhead cost and that the actual volume of production was higher than estimated. Based on this information alone: A. The correct amount of cost was assigned to products during the accounting period. B. Too much cost was assigned to products during the accounting period. C. Too little cost was assigned to products during the accounting period. D. The answer cannot be determined from the information provided.
