Question: Cost Allocation (Direct Method): Allocate the overhead costs for Ford Motor Company to its production departments using the direct method, given the following data: Overhead

Cost Allocation (Direct Method): Allocate the overhead costs for Ford Motor Company to its production departments using the direct method, given the following data:

  • Overhead Costs: $500,000
  • Production Department A: 30% of direct labor hours
  • Production Department B: 70% of direct labor hours
  • Direct Labor Hours: Department A = 8,000 hours, Department B = 12,000 hours 

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