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ABC products makes parts for car engines. three departments (A, B and C) are involved in the manufacturing process. The budgets for departmental overhead costs
ABC products makes parts for car engines. three departments (A, B and C) are involved in the manufacturing process. The budgets for departmental overhead costs are $25,000, $45,000 and $30,000 respectively, which are allocated to products based on direct labor hours. Estimates of direct labor hours for each department are 5,000 7,000 and 10,000 hours respectively. The business-wide overhead absorption rate is:
a. $3.00
b. $4.55
c. $4.81
d. 5.00
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