Maria's Custom Tailoring Is Very Labour Intensive

question 12

Multiple Choice

Maria's Custom Tailoring is very labour intensive.Therefore,Maria has decided to use direct labour hours as the cost driver for assigning overhead costs to specific jobs.During the month of February,the company incurred overhead costs of $3000.Total direct labour hours during the month totalled 600.Out of a total of 30 different jobs worked on during the month,Job #100 required 6 direct labour hours to complete and Job #200 required 10 direct labour hours.The total amount of overhead allocated to these two jobs is:

• A) $ 80.00
• B) $187.50
• C) $ 37.50
• D) $ 16.00

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Definitions:

Revenue Accounts

Accounts that track the income generated from a company's operations, such as sales revenue, service revenue, and interest income.

Liability Accounts

Accounts on a company's balance sheet that track what the company owes to others, such as loans payable, accounts payable, and mortgage payable.