Question
Pavot Industries manufactures handcrafted furniture. The accountant is attempting to gain control of the overhead costs. Because the furniture is crafted by hand, direct labour
Pavot Industries manufactures handcrafted furniture. The accountant is attempting to gain control of the overhead costs. Because the furniture is crafted by hand, direct labour hours are used to apply the overhead. The accountant has gathered the following data relating to direct labour hours and total overhead costs for a six-year period. Direct labour hours Total factory overhead costs 20X2 46,800 $297,000 20X3 36,000 $276,000 20X4 40,800 $262,500 20X5 48,000 $288,000 20X6 45,000 $254,250 a) Y = 45,000 + (1.00 x quantity) b). Y = -814,000 + (23.75 x quantity) c). Y = 118,000 + (3.54 x quantity) d) Y = 240,000 + (1.00 quantity)
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