Question
Mexican Spices Company makes two types of salsa, hot and mild. Information for the two flavors appears below: Hot Mild Sales $400,000 $600,000 Direct materials
Mexican Spices Company makes two types of salsa, hot and mild. Information for the two flavors appears below:
|
| Hot | Mild |
| Sales | $400,000 | $600,000 |
| Direct materials | $100,000 | $200,000 |
| Direct labor | $50,000 | $150,000 |
| Labor hours | 5,000 | 10,000 |
Mexican Spices incurred $240,000 in overhead costs for the period. Assume that Mexican Spices allocates the overhead costs to the products based on the labor cost. How much is the overall profit for Mexican Spices?
$500,000
$260,000
$700,000
$520,000
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The Internal Auditing Handbook
Authors: K. H. Spencer Pickett
3rd Edition
0470518715, 978-0470518717
