Question # 2 (20 marks; 20 min)

Indirect labour (IDL) $10,600 $11,500

Indirect materials (IDM) 4,400 5,000

Total (MOH) $15,000 $16,500

DL(direct labour) $12,000 $15,000

MOH = a + b*DL cost

Required:

Determine a and b. (6 marks)

If DL cost is$13,200, how much would be allowed for IDL and IDM, individually?

Hint: Find the linear relationship between MOH and IDM (14 marks)

That is estimate MOH = c + d*IDM