Keene Company Allocates Overhead on the Basis of Direct Labor

question 88

Multiple Choice

Keene Company allocates overhead on the basis of direct labor hours.It allocates overhead costs of $8,000 to two different jobs as follows: Job 1: (10 hours) = $4,000;Job 2: (10 hours) = $4,000
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 increased to $12,000.How much overhead cost will be assigned to Job 1 after automation?

• A) $10,000
• B) $6,000
• C) $4,000
• D) $2,000

Comprehend the concept of disruptive innovation and its impact on businesses' product development strategies.

Learn how SWOT analysis and environmental scanning contribute to new-product strategy development and the overall new-product development process.

Understand the concept testing phase and its role in evaluating new-product ideas before moving to the actual production phase.

Comprehend various strategies firms adopt to generate new-product ideas including crowdsourcing and its impact on innovation.

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The removal of intermediaries in a supply chain, allowing for direct transactions between producers and consumers.

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