Question: Elevator Co. makes two product models, A and B, and provides both installation and inspection services for its customers. Budgeted information is as follows:

Elevator Co. makes two product models, A and B, and provides both

Elevator Co. makes two product models, A and B, and provides both installation and inspection services for its customers. Budgeted information is as follows: Installation Inspection Total Budgeted overhead 300,000 210,000 510,000 Budgeted labor hours 2,000 3,000 5,000 Product A Product B Total Direct labor hours per unit: 2.0 1.5 5,000 Installation 1.0 0.5 2,000 Inspection 1.0 1.0 3,000 Units 1,000 2,000 3,000 The company uses a departmental method to allocate overhead in each of the two cost pools - installation and inspection. How much overhead is allocated to product A if the company uses direct labor hours as the allocation base?

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