Kirsten believes her company's overhead costs are driven (affected) by the number of direct labor hours because
Fantastic news! We've Found the answer you've been seeking!
Question:
Kirsten believes her company's overhead costs are driven (affected) by the number of direct labor hours because the production process is very labor intensive. During the period, the company produced 5,000 units of Product A requiring a total of 1,600 labor hours and 2,500 units of Product B requiring a total of 400 labor hours. What allocation rate should be used if the company incurs overhead costs of $20,000?
a. $10 per labor hour
b. $2.67 per unit
c. $12.50 per labor hour for Product A and $50 per labor hour for Product B
d. None of these.
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
Posted Date: