Question: Morris company allocated overhead based on direct labor hours. It allocated overhead costs of $13,800 to two different jobs as follows Job 1(10hours) = $6900;

Morris company allocated overhead based on direct labor hours. It allocated overhead costs of $13,800 to two different jobs as follows

Job 1(10hours) = $6900; job 2(10hours) = $6900

The production process for job 2 was then automated. Now job 2 requires only two hours of direct labor but three hours of mechanical processing. As a result total overhead has increased $18,000. With the change in the production process for job 2 the amount of overhead assigned to:

Job 1 will increase

Each product will increase

Job 1 will decrease

Each product will decrease

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