Callaghan Company s annual factory depreciation is 450 000 Callaghan estimated it
Callaghan Company’s annual factory depreciation is $450,000. Callaghan estimated it would operate the factory a total of 3,600 hours this year. The factory operated 300 hours in November and 200 hours in December.

Required
Why would Callaghan need to allocate factory depreciation cost? How much depreciation cost should Callaghan allocate to products made in November and those made in December?

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