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Balluga manufacturing has the following estimated costs for the period: - Direct labor: $250,000 - Direct labor hours: 16,000 - Machine operating costs: $50,000 -
Balluga manufacturing has the following estimated costs for the period: - Direct labor: $250,000 - Direct labor hours: 16,000 - Machine operating costs: $50,000 - Machine hours: 2000 - Rent on factory building: $40,000 - Rent on corporate office: $15,000 - Factory supervisor salary: $45,000 - Direct materials purchases: $200,000 Actual data for the period is as follows: - Manufacturing overhead: $140,000 - Direct labor hours 15.000 - Machine hours 2200 Which of the following statements is true about ALLOCATED manufacturing overhead: Allocating overhead on the basis of machine hours will be MORE accurate (i.e. allocated overhead will be closer to actual overhead) than allocating on the basis of direct labor hours. Allocating overhead on the basis of machine hours will be LESS accurate (i.e. allocated overhead will be farther from actual overhead) than allocating on the basis of direct labor hours. Allocated overhead will be the same regardless of whether machine hours or direct labor hours is used for allocation
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