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8) Dog Company makes metal signs for businesses and residences. These signs are made of sheet metal, which the owner paints by hand. The owner
8) Dog Company makes metal signs for businesses and residences. These signs are made of sheet metal, which the owner paints by hand. The owner is concerned that he does not have a good measure of support costs for the signs. Currently, he predicts support costs to be 30 percent of the cost of materials. Close investigation of the business reveals that $10 per direct labor hour is a more plausible and reliable support cost measure. Dog Company has the following information available: Small Sign Large $300 Sign $700 Materials cost Direct labor hours Using direct labor hours as the cost driver, what amount of support costs is assigned to the large sign? A) $60 B) $110 C) $33 D) $160
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