Aaron Company makes two products. Product X requires 4,000 hours of labor, and Product Y requires 6,000 hours of labor. Aaron undertook an automation program that reduced the consumption of labor required by Product Y to only 2,000 hours of labor. Product X was not affected by the automation process. Overhead cost prior to the automation totaled $10,000. After automation, overhead cost amounted to $24,000. Assuming Aaron uses direct labor hours as a company-wide allocation base before and after the automation, the amount of overhead cost allocated to:

A. Product X would be $4,000 prior to automation and $16,000 after automation.

B. Product X would be $6,000 prior to automation and $8,000 after automation.

C. Product Y would be $8,000 prior to automation and $8,000 after automation.

D. Product Y would be $2,000 prior to automation and $12,000 after automation.

Answer rating: 100% (QA)

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