West State Furniture (WSF) manufactures desks and desk chairs using two departments within a single...
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West State Furniture WSF manufactures desks and desk chairs using two departments within a single facility. The West Department produces the desks, and the State Department produces the chairs. WSF uses plantwide allocation to allocate its overhead to all products. Direct materials cost is the allocation base. The rate used is percent of direct materials cost. Last year, revenue, direct materials, and direct labor were as follows. Required: a Compute the profit or loss for each product using plantwide allocation. b The new CFO at WSF was surprised that the company used a plantwide rate, because the two products were produced in separate departments. The cost analyst estimated the overhead rates for each department separately. Using department rates, the West Department rate would be percent of direct materials cost. The State Department rate would be percent of direct materials cost. Recompute the profits or loss for each product using each department's allocation rate base on direct materials cost in each department 
West State Furniture WSF manufactures desks and desk chairs using two departments within a single facility. The West
Department produces the desks, and the State Department produces the chairs. WSF uses plantwide allocation to allocate its
overhead to all products. Direct materials cost is the allocation base. The rate used is percent of direct materials cost. Last
year, revenue, direct materials, and direct labor were as follows.
Required:
a Compute the profit or loss for each product using plantwide allocation.
b The new CFO at WSF was surprised that the company used a plantwide rate, because the two products were produced in
separate departments. The cost analyst estimated the overhead rates for each department separately. Using department
rates, the West Department rate would be percent of direct materials cost. The State Department rate would be
percent of direct materials cost. Recompute the profits or loss for each product using each department's allocation rate base
on direct materials cost in each department
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