Pitt Jones Company had the following activities, allocated costs, and allocation bases: Activities Account inquiry (hours) Account billing (lines) Account verification (accounts) Correspondence (letters) Direct Labor Cost Indirect CostsAllocation Base 60,000 $30,000 15,000 $10,000 $625,000 2,000 hours 20,000 lines 20,000 accounts 1,000 letters Direct Labor Hours15,000 hours The above activities are carried out at two of their regional offices. Account inquiry (hours) Account billing (lines) Account verification (accounts) Correspondence (letters) Northeast Office 100 hours 10,000 lines 1,000 accounts 50 letters Midwest Office 200 hours 7.000 lines 600 accounts 100 letters Complete the 4 step process to allocate overhead to each office. Pitt Jones Company is estimating that the Northeast Office will handle 175 contracts a Midwest Office will handle 225 contracts respectively. Additional relevant informatio from Pitt Jones: Direct Materials per contract $15,000 and Direct Labor per contract $26,850. Complete the estimated cost per contract. Complete the same problem using the single base allocation method, using direct lab hours as a base. The Northeast Office used 7,400 direct labor hours and the Midwest Office used 7,600 hours. Compare the two estimated costs per contract. Which is method is superior? a. b. c. Wh d. D M DL 150o o 42 So 75 26 8So x 30