Ascend Company makes three models of jump drives in its factory: J512, J1G, and J4G. The expected…

Ascend Company makes three models of jump drives in its factory: J512, J1G, and J4G. The expected overhead costs for the next fiscal year are as follows:

Payroll for factory managers ………………………. $150,000

Factory maintenance costs …………………………. 60,000

Factory insurance …………………………………… 30,000

Total overhead costs ……………………………… $240,000

Ascend uses labor hours as the cost driver to allocate overhead cost. Budgeted labor hours for the products are as follows:

J512 ……………………… 2,000 hours

J1G ……………………. 1,200

J4G …………………… 800

Total labor hours ……….. 4,000

Required

a. Allocate the budgeted overhead costs to the products.

b. Provide a possible explanation as to why Ascend chose labor hours, instead of machine hours, as the allocation base.

Ascend Company makes three models of jump drives in its

"Is this question part of your assignment? We can help"

ORDER NOW

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *