Alphabet Corporation is preparing its annual budget. As part of its analysis of the contribution of individual products to overall profitability, the controller estimates the amount of overhead that should be assigned to the individual product lines, Budgeted inspection costs are $15,000. Additional information is as follows: Small Pumps Large Pumps Units inspected 150 150 Hours spent inspecting 2.5 17.5 Direct labour hours per unit 2.5 2.5 Under a traditional costing system that assigns overhead based on units inspected, the inspection costs allocated to one small pump would be: 

a). $2.50 

b). $50 

c). $300 

d). $20 rn

Answer rating: 100% (QA)

Question 41 Overheads are assigned on the basis of ... View the full answer