Allocating the overhead cost to the five boats


Question:

Boston Boat Company builds custom sailboats for customers. During the current accounting period, the company built five different-sized boats that ranged in cost from $35,000 to $185,000. The company"s manufacturing overhead cost for the period was $118,000. Would you recommend using the number of units (boats) or direct labor hours as the base for allocating the overhead cost to the five boats? Why?

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Allocating the overhead cost to the five boats
Reference No:- TGS02047615

Expected delivery within 24 Hours