Question

Dawg Town produces dog tags and bowls with the name of your dog permanently etched into a stainless steel label. Indirect etching costs are allocated to tags and bowls based on the amount of time spent on the laser etching machine. The company has budgeted etching costs of $4,224 per month and expects to spend 4,800 hours on the etching labels each month. Each dog tag uses 24 minutes and each bowl uses 6 minutes of laser etching time. How much of the etching costs will be allocated to each dog tag

Answer 1

To calculate the allocated etching costs for each dog tag, divide the laser etching time for dog tags by the total laser etching time and multiply by the total etching costs.

Step-by-step explanation:

To calculate how much of the etching costs will be allocated to each dog tag, we need to determine the proportion of laser etching time for dog tags compared to the total laser etching time for both dog tags and bowls.

Each dog tag uses 24 minutes of laser etching time, and each bowl uses 6 minutes. So, the total laser etching time for dog tags is 24 * number of dog tags, and the total laser etching time for bowls is 6 * number of bowls.

Let's suppose there are 'x' dog tags. The proportion of laser etching time for dog tags would be (24 * x) / ((24 * x) + (6 * number of bowls)). Finally, we can calculate the allocated etching costs for each dog tag by multiplying this proportion by the total etching costs for the month.

Answer 2

the amount of etching cost that should be allocated to each dog tag is $0.35

Step-by-step explanation:

The computation of the amount of etching cost that should be allocated to each dog tag is as followS:

= (Budgeted etching cost ÷ (spending hours × 60)) × number of minutes used

= ($4,224 ÷ (4,800 hours × 60)) × 24 minutes

= $0.35

Hence, the amount of etching cost that should be allocated to each dog tag is $0.35