Arlin Fabrication Company produces tools on a job order basis
Arlin Fabrication Company produces tools on a job order basis. During May, two jobs were completed, and the following costs were incurred:
Other factory costs for the month totaled $16,800. Factory overhead costs are allocated one-third to Job 401 and two-thirds to Job 402.
a. Describe two alternative methods for assigning the overtime premium cost to Jobs 401 and 402 and explain how the appropriate method would be determined.
b. Compute the cost of Jobs 401 and 402 under each of the two methods described in part a.
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