Cat Company makes metal signs for businesses and residences.These signs are made of sheet metal,which the owner paints by hand.The owner is concerned that he does not have a good measure of support costs for the signs.Currently,he predicts support costs to be 30 percent of the cost of materials.Close investigation of the business reveals that $10 per direct labor hour is a more plausible and reliable support cost measure.Cat Company has the following information available: Using direct labor hours as the cost driver,what amount of support costs is assigned to the small sign?

Question

Cat Company makes metal signs for businesses and residences.These signs are made of sheet metal,which the owner paints by hand.The owner is concerned that he does not have a good measure of support costs for the signs.Currently,he predicts support costs to be 30 percent of the cost of materials.Close investigation of the business reveals that $10 per direct labor hour is a more plausible and reliable support cost measure.Cat Company has the following information available:  Using direct labor hours as the cost driver,what amount of support costs is assigned to the small sign?

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The Answer of Cat Company makes metal signs for businesses and residences.These signs are made of sheet metal,which the owner paints by hand.The owner is concerned that he does not have a good measure of support costs for the signs.Currently,he predicts support costs to be 30 percent of the cost of materials.Close investigation of the business reveals that $10 per direct labor hour is a more plausible and reliable support cost measure.Cat Company has the following information available:  Using direct labor hours as the cost driver,what amount of support costs is assigned to the small sign?

Cat Company Makes Metal Signs for Businesses and Residences