Question
Friendly Company allocates overhead based on direct labor hours. It allocates overhead costs of $12,800 to two different jobs as follows: Job 1: (10 DL
Friendly Company allocates overhead based on direct labor hours. It allocates overhead costs of $12,800 to two different jobs as follows:
Job 1: (10 DL hours) = $6,400; Job 2: (10 DL hours) = $6,400
The production process for Job 2 was then automated. Now Job 2 requires only two hours of direct labor but four hours of mechanical processing. As a result, total overhead increases to $17,000. With the change in the production process for Job 2, the amount of overhead assigned to:
Which option below is correct?
a.each product will decrease | ||
b.Job 1 will decrease | ||
c.each product will increase | ||
d.Job 1 will increase |
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