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Reef Shoe Company has expected overhead costs of $864,000. The majority of the overhead costs are incurred providing production support to the direct labor
Reef Shoe Company has expected overhead costs of $864,000. The majority of the overhead costs are incurred providing production support to the direct labor force. Direct labor rates vary from $12 to $21 per hour, and more complex tasks are assigned to more skilled workers who have higher pay rates. Management projects direct labor costs to be $540,000 and 39,273 direct labor hours. More complex tasks require proportionally more support than do the less complex tasks Each model/size of shoe is produced in a separate production batch and constitutes a job. Reef allocates overhead based on direct labor cost. During the year, the company produced 6,600 pairs of the size 8 Beachcomber flip flop. A total of 4,200 direct labor hours, costing $54,600, were needed for the job. How much overhead will be assigned to the size 8 Beachcomber flip flops? O $92,400 O $90,560 O $87,360 $57,750
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