Bates Company Makes Two Products

question 50

Multiple Choice

Bates Company makes two products.Product X requires 6,000 hours of labor,and Product Y requires 4,000 hours of labor.Bates undertook an automation program that reduced the consumption of labor required by Product X to only 2,000 hours of labor.Product Y was not affected by the automation process.Overhead cost prior to the automation totaled $10,000.After automation,overhead cost amounted to $24,000.Assuming Bates uses direct labor hours as a companywide allocation base before and after the automation,the amount of overhead cost allocated to:

• A) Product X would be $4,000 prior to automation and $16,000 after automation.
• B) Product X would be $6,000 prior to automation and $16,000 after automation.
• C) Product Y would be $8,000 prior to automation and $8,000 after automation.
• D) Product Y would be $4,000 prior to automation and $16,000 after automation.

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1960s and 1970s

Decades known for significant social change, civil rights movements, and cultural revolutions around the world.

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