Question 174285: Can someone please help me with this problem:
A company allocated overhead on the basis of direct labor hours. It allocated overhead costs of $4,000 to two different jobs as follows:
Job 1:(10 hours) = $2,000
Job 2:(10 hours) = $2,000
Assume that, then the production process for Job 1 was automated. Now Job 1 requires only 2 hours of direct labor but four hours of mechanical processing. As a result, total overhead increased to $6,000. How much overhead cost will be assigned to Job 2 after automation?
$1,000
$2,000
$3,000
$5,000
Answer by Mathtut(3670)   (Show Source):
You can put this solution on YOUR website! job 1(2 hours)
job 2(10 hours)
:
total hours 12
:
percentage of job 2 hours to total hours:
:
10/12
:
overhead cost assigned to job 2:: 10/12(6000)=5000
:
answer is D
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