John associates produces carburetors for small engines and uses a normal costing system. The following data are available for 2019. Budgeted: Overhead $ 4,500,000 Machine
John associates produces carburetors for small engines and uses a normal costing system. The following
data are available for 2019.
Budgeted:
Overhead $ 4,500,000
Machine hours 187,500
Direct labor hours 600,000
Actual:
Unit produced 750,000
Overhead $4,466,250
Prime cost $ 6,750,000
Machine hours 187,875
Direct labor hours 585,000
Overhead is applied based on direct labor
1How can JohnAssociates decide whether to use direct labor hours or machine hours as the basis
for applying overhead?
2.whats is the unit cost for the year?
3.Base on machine hours what’s the unit cost
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