Jason Anderson had been allocating MOH costs to his products using a single plant$-$wide rate of $$14\mathrm{.}00$ per DL hour. His accountants

were now suggesting the use of the following activity$-$based rates.

$$20$ per production run

$$7$ per direct labor hour

$$5$ per inspection hour

If the most recent job required $60$ production runs, $450DL$ hours, and $30$ inspection hours, specify how much MOH cost would have

been allocated under the previous plant$-$wide rate, as well as what would be allocated using the suggested ABC rates.

Allocation using plant$-$wide rate

Allocation using ABC rates

Which of these approaches is likely the most accurate?

is likely the most accurate.