[Solved] Jones Construction Currently Uses Traditional Costing Where Overhead Is Applied
Jones Construction currently uses traditional costing where overhead is applied based on direct labour hours.Using traditional costing,the applied overhead rate is $20 per direct labour hour. They are considering a switch to activity-based costing (ABC).The company controller has come up with preliminary overhead rates for each of the following activities: One of the company's current jobs has the following information available: Which of the following statements is true when comparing the total overhead allocated to the job using traditional versus ABC costing?
A) ABC costing will yield $215 less in overhead cost being allocated to the job.
B) ABC costing will yield $735 less in overhead cost being allocated to the job.
C) ABC costing will yield $545 more in overhead cost being allocated to the job.
D) ABC costing will yield $785 more in overhead cost being allocated to the job.
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