Yole Manufacturing Company has just completed job nos. C14 and C15, which were similar in terms of complexity, production processes, and units manufactured. Job no. C14 was manufactured by Scott Moore who earns $22 per hour, whereas job no. C15 was completed by Cathy Ferguson who earns $30 per hour. If Scott and Cathy are equally efficient, would the company be better off using direct labour cost or direct labour hours as the cost driver in its predetermined overhead rate? Briefly explain.

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The Answer of Yole Manufacturing Company has just completed job nos. C14 and C15, which were similar in terms of complexity, production processes, and units manufactured. Job no. C14 was manufactured by Scott Moore who earns $22 per hour, whereas job no. C15 was completed by Cathy Ferguson who earns $30 per hour. If Scott and Cathy are equally efficient, would the company be better off using direct labour cost or direct labour hours as the cost driver in its predetermined overhead rate? Briefly explain.

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