Paul Co. produces high tensile brake pads for tandem axle over the road trailers. Two types...

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Paul Co. produces high tensile brake pads for tandem axle over the road trailers. Two types of pads are produced, one includes a graphite barrier which requires three hours of additional machining. The company produces 1000 pads per year with a 50/50 sales mix. The company also incurs $175000 of MOH costs which are primarily utilities. A. Allocate the MOH cost on the basis of machine hours. a. MCH hours Graphite 5500 Non-graphite 1500 B. Allocate the MOH costs on the basis of units produced. C. Choose which cost driver would be the most appropriate and describe why. Paul Co. produces high tensile brake pads for tandem axle over the road trailers. Two types of pads are produced, one includes a graphite barrier which requires three hours of additional machining. The company produces 1000 pads per year with a 50/50 sales mix. The company also incurs $175000 of MOH costs which are primarily utilities. A. Allocate the MOH cost on the basis of machine hours. a. MCH hours Graphite 5500 Non-graphite 1500 B. Allocate the MOH costs on the basis of units produced. C. Choose which cost driver would be the most appropriate and describe why.

Answer rating: 100% (QA)

A To allocate the MOH cost on the basis of machine hours we need to calculate the predetermined over... View the full answer