Sheddon Industries Produces Two Products The Company's Overhead Costs of $108,000 Are Allocated Based on Follows

question 158

Multiple Choice

Sheddon Industries produces two products.The products' identified costs are as follows: $\begin{array}{lrr}&\text { Product A }&\text { Product B }\\ \text { Direct materials} &\$20,000&\$15,000\\ \text { Direct labor} &12,000&24,000\\\end{array}$
The company's overhead costs of $108,000 are allocated based on labor cost.Assume 4,000 units of product A and 5,000 units of Product B are produced.What amount of production costs would be assigned to Product A? (Do not round intermediate calculations.)

• A) $36,000
• B) $111,000
• C) $68,000
• D) None of the answers are correct.

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Definitions:

Selling Price

The amount for which a product or service is sold to a customer.

Accurate

Free from errors or mistakes; precise and correct in details.

Cent

The smallest denomination of many currencies, representing 1/100th of the currency's main unit.

Percent

A ratio or fraction calculated out of 100, used to indicate portions of a whole.