Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 9

The company you work for currently allocates insurance costs on the basis of cost per direct labor hour. This indirect cost component for the year is budgeted at $36,000. If the direct labor hours for departments A, B, and C are expected to be 2000, 8000, and 5000, respectively, this year, determine the allocation to each department.