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Bates Company makes two products. Product X requires 7,400 hours of labor, and Product Y requires 5,400 hours of labor. Bates undertook an automation program
Bates Company makes two products. Product X requires 7,400 hours of labor, and Product Y requires 5,400 hours of labor. Bates undertook an automation program that reduced the consumption of labor required by Product X to only 3,400 hours of labor. Product Y was not affected by the automation process. Overhead cost prior to the automation totaled $16,640. After automation, overhead cost amounted to $35,200. Assuming Bates uses direct labor hours as a companywide allocation base before and after the automation, the amount of overhead cost allocated to: Multiple Choice Product X would be $7,020 prior to automation and $21,600 after automation. Product Y would be $7,020 prior to automation and $21,600 after automation. d Product X would be $9,620 prior to automation and $21,600 after automation O Product Y would be $13,600 prior to automation and $21,600 after automation
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