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Gregory Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year Overhead Costs Cost driver Cost
Gregory Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year Overhead Costs Cost driver Cost Poo Supervision of direct labor Machine maintenance Facility rent Total overhead costs $320,000 Direct labor-hours 120,000 Machine hours $200,000Square feet of area $640,000 Activity level 800,000 960,000 100,000 The accounting records show the Mossman Job consumed the following resources: Cost driver Actual level Direct labor-hours 200 O A. Three activity-cost drivers because product costs can be significantly cross-subsidized O B. Single direct labor-hours cost driver because it is best to allocate total costs uniformly to individual jobs O C. Single direct labor-hours cost driver because it is easiest to analyze and interpret O D. Three activity-cost drivers because they best reflect the relative consumption of resources
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