Question: Friendly Company allocates overhead based on direct labor hours. It allocates overhead costs of $12,800 to two different jobs as follows: Job 1: (10 DL

Friendly Company allocates overhead based on direct labor hours. It allocates overhead costs of $12,800 to two different jobs as follows:

Job 1: (10 DL hours) = $6,400; Job 2: (10 DL hours) = $6,400

The production process for Job 2 was then automated. Now Job 2 requires only two hours of direct labor but four hours of mechanical processing. As a result, total overhead increases to $17,000. With the change in the production process for Job 2, the amount of overhead assigned to:

Which option below is correct?

		a.each product will decrease
		b.Job 1 will decrease
		c.each product will increase
		d.Job 1 will increase

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