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Which method of allocation probably best estimates actual overhead costs used? Why? Choose the best answer. Cost Pool Supervision of direct labor Machine maintenance Facility
Which method of allocation probably best estimates actual overhead costs used? Why? Choose the best answer.
Cost Pool Supervision of direct labor Machine maintenance Facility rent Total overhead costs Overhead Costs $320,000 $120,000 $200,000 $640,000 Cost driver Direct labor-hours Machine - hours Square feet of area Activity level 800,000 960,000 100,000 The accounting records show the Mossman Job consumed the following resources: Cost driver Actual level Direct labor-hours 200 Machine -hours 1,600 Square feet of area 50 A. Single direct labor hours cost driver because it is easiest to analyze and interpret. B. Single direct labor-hours cost driver because it is best to allocate total costs uniformly to individual jobs. O C. Three activity - cost drivers because product costs can be significantly cross subsidized. OD. Three activity - cost drivers because they best reflect the relative consumption of resourcesStep by Step Solution
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