Johnstone Company manufactures two products, Board 12 and Case 165. Johnstone's overhead costs consist of setting up machines, $1,600,000; machining, $3,600,000; and inspecting, $1,200,000. Information on the two products is: Board 12 Case 165 Direct labor hours 15,000 25,000 Machine setups 600 400 Machine hours 24,000 26,000 Inspections 800 700 Overhead applied to Board 12 using traditional costing using direct labor hours is a.) 2,400,000 b.) 3,072,000 c.) 3,340,000 d.) 3,840,000

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Johnstone Company manufactures two products, Board 12 and Case 165. Johnstone's overhead costs consist of setting up machines, $1,600,000; machining, $3,600,000; and inspecting, $1,200,000. Information on the two products is:

Board 12              Case 165

 

Direct labor hours                                      15,000                   25,000

 

Machine setups                                              600                        400

 

Machine hours                                           24,000                   26,000

 

Inspections                                                     800                        700

Overhead applied to Board 12 using traditional costing using direct labor hours is

 

a.) 2,400,000

b.) 3,072,000

c.) 3,340,000

d.) 3,840,000

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