Maroone, Inc., has identified the following overhead costs and activity drivers for next year:
The following are the two product models completed during the year:
The company's normal activity is 20,000 direct labor hours.
Required:
a. Determine the unit cost for each job using direct labor hours to apply overhead.
b. Determine the unit cost for each job using the four activity drivers. (Round amounts to 2 decimal places.)
c. Which method produces the more accurate cost assignment? Why?

Question

Maroone, Inc., has identified the following overhead costs and activity drivers for next year:
  The following are the two product models completed during the year:
   The company's normal activity is 20,000 direct labor hours.
Required: 
a. Determine the unit cost for each job using direct labor hours to apply overhead.
b. Determine the unit cost for each job using the four activity drivers. (Round amounts to 2 decimal places.)
c. Which method produces the more accurate cost assignment? Why?

Quizplus · Accepted Answer

The Answer of Maroone, Inc., has identified the following overhead costs and activity drivers for next year:
  The following are the two product models completed during the year:
   The company's normal activity is 20,000 direct labor hours.
Required: 
a. Determine the unit cost for each job using direct labor hours to apply overhead.
b. Determine the unit cost for each job using the four activity drivers. (Round amounts to 2 decimal places.)
c. Which method produces the more accurate cost assignment? Why?