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Austin Company manufactures two products, Flacca and Gordo. Overhead costs are comprised of machine setups, $1,600,000; machining, $3,600,000; and inspecting, $1,200,000. Recent data are
Austin Company manufactures two products, Flacca and Gordo. Overhead costs are comprised of machine setups, $1,600,000; machining, $3,600,000; and inspecting, $1,200,000. Recent data are shown below: Flacca Gordo Direct labor hours 15,000 25,000 Machine setups 600 400 Machine hours 24,000 26,000 Inspections 800 700 Overhead assigned to Gordo using a single overhead (OH) rate based on direct labor hours and using ABC, respectively, would be: $2,400,000 and $3,072,000 $4,000,000 and $3,072,000 $2,400,000 and $3,328,000 O $4,000,000 and $2,400,000
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