Question
Morris Company allocates overhead based on direct labor hours. It allocates overhead costs of $13,800 to two different jobs as follows: Job 1: (10 hours)
Morris Company allocates overhead based on direct labor hours. It allocates overhead costs of $13,800 to two different jobs as follows: Job 1: (10 hours) = $6,900; Job 2: (10 hours) = $6,900 The production process for Job 2 was then automated. Now Job 2 requires only 2 hours of direct labor but 4 hours of mechanical processing. As a result, total overhead increases to $18,600. With the change in the production process for Job 2, the amount of overhead assigned to:
A. each product will increase.
B. Job 1 will decrease
C. each product will decrease
D. Job 1 will increase
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