Direct material cars: $ watches: $
labor hours cars: watches:
labor rate per hour cars: $ watches: $
number made and sold cars: watches:
overhead:
rent on factory where both are made: $
lathe: $
diagnostic machine: $
inspection: $
Total overhead: $
Determine the cost of a car and a watch if the company uses labor hours to allocate overhead.
The company decided to use activity based costing and determined the following:
rent labor hours
lathe hour per watch and hours per car
diagnostic machine hours per watch and hours per car
inspection hour per watch and hour per car
Determine the cost of a car and a watch using activity based costing
