Globe Company produces two products, A1 and B2. A1 is a high-volume item totaling 20,000 units annually. B2 is a low-volume item totaling only 6,000 units per year. A1 requires one hour of direct labor for completion, while each unit of B2 requires 2 hours. Therefore, total annual direct labor hours are 32,000 (20,000 + 12,000). Expected annual manufacturing overhead costs are $640,000. Globe uses a traditional costing system and assigns overhead based on direct labor hours. Each unit of B2 would be assigned overhead of
d. need more information to compute.
can somebody explain to me how the answer is C?
ACTIVITY-BASED COSTING - shan, Wednesday, February 22, 2012 at 3:36am
640,000/32,000 = 20
20*2 = 40