Morris Company Allocates Overhead on the Basis of Direct Labor

question 139

Multiple Choice

Morris Company allocates overhead on the basis of direct labor hours.It allocates overhead costs of $12,800 to two different jobs as follows: Job 1: (10 hours) = $6,400;Job 2: (10 hours) = $6,400
The production process for Job 2 was then automated.Now Job 2 requires only two hours of direct labor but four hours of mechanical processing.As a result,total overhead increases to $17,000.With the change in the production process for Job 2,the amount of overhead assigned to:

• A) The amount of overhead assigned to each product will increase.
• Do you want to capitalize these since a continuation of a sentence?
• I moved duplicate wording to question.JMF
• B) The amount of overhead assigned to Job 1 will decrease.
• C) The amount of overhead assigned to each product will decrease.
• D) The amount of overhead assigned to Job 1 will increase.
• Do you want to capitalize these since a continuation of a sentence?
• I moved duplicate wording to question.JMF

---

Definitions:

Y-variable

In statistical modeling and experiments, the dependent variable that is influenced or predicted by another variable (X-variable), used to measure outcomes or results.

Opposite Directions

A term indicating movements or trends that are diametrically contrary to each other in a physical or metaphorical sense.

Upward Sloping

A term often used to describe a line on a graph that shows an increase in a variable as another variable increases, indicative of a direct relationship.

Positively Related

A term describing the relationship between two variables where they move in the same direction; when one increases, the other also increases, and vice versa.