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please show steps and equations! Secure-Front Door Company makes solid wood and steel front doors. It uses 500 total labor hours to produce both the
please show steps and equations!
Secure-Front Door Company makes solid wood and steel front doors. It uses 500 total labor hours to produce both the wood and steel doors ( 300 labor hours for wood doors and 200 labor hours for steel doors). It allocates "labor overhead costs" of $5,000 to the wood and steel doors based on direct labor hours, which leads to the following allocation: Wood Door Overhead Allocation =$3,000 Steel Door Overhead Allocation =$2,000 The production process has now been automated so that the amount of labor hours has decreased in total to 400 hours, but steel doors has benefited more from the automation - labor hours for steel door are now 100 , while the labor hours for wood doors is still 300 , as described below: Wood Doors (300 Labor Hours) Steel Doors (100 Labor Hours) (Note that the original labor overhead costs have not changed and are still $5,000 in total.) However, the new automation equipment has added an additional $3,000 in "machine overhead costs." The machine overhead costs are allocated based on machine hours. The wood doors use 50 machine hours, while the steel doors use 200 machine hours (a total of 250 machine hours), which is summarized below: Wood Doors (50 machine hours) Steel Doors (200 machine Hours) What is the most accurate amount of the TOTAL overhead (labor overhead and machine overhead) that should be allocated to steel doors after the automation? A. $6,400 B. $4,400 C. $3,650 D. 53,200 E. None of the above answers can be determined as correct Step by Step Solution
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