Ernest, SA

question 56

Essay

Ernest, SA., has identified the following overhead costs and cost drivers for next year: The following are two of the jobs completed during the year: The company's normal activity is 32,000 direct labour hours. (Round amounts to two decimal places.)
Required:
a.
Determine the unit cost for each job using direct labour hours to apply overhead.
b.
Determine the unit cost for each job using the four cost drivers.
c.
Which method produces the more accurate cost assignment? Why?

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Definitions:

Irregular

Deviating from the norm or standard, often used to describe something that is not consistent in pattern, arrangement, or frequency.

Recumbent Position

A lying down position where the individual is on their back, often used in medical examinations or procedures.

Heart Rate

The number of heartbeats per minute, indicating cardiovascular health and fitness levels.

Blood Pressure

The force exerted by circulating blood against the walls of the body's arteries, a crucial indicator of cardiovascular health.