Auburn,Inc.'s overhead costs of $700,000 consist of machining $400,000; inspecting $200,000; and packaging $100,000.Machining works 4,000 hours a year,500 inspections occur each year,and 1,000 packing order occur each year.Information on the company's two products are as follows: Alpha Omega
Machining hours 1,000 3,000
Inspections 100 400
Packing orders 350 650
Direct labor hours 1,700 1,800
Determine how much overhead is allocated to Omega assuming the use of a single overhead rate based on direct labor hours and assuming the use of ABC,respectively.
A) $340,000 and $360,000
B) $340,000 and $175,000
C) $360,000 and $175,000
D) $360,000 and $525,000
Correct Answer:
Verified
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