Keene Company allocates overhead based on 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

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The Answer of Keene Company allocates overhead based on 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

Keene Company Allocates Overhead Based on Direct Labor Hours