A company estimates total overhead costs for the next year

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A company estimates total overhead costs for the next year to be $1,500,000 and wishes to use direct labor hours as it overhead allocation base. This company makes two products:Fancy X, which requires 3 direct labor hours per unit; and Plain X, which requires 1 direct labor hour per unit. If the company plans to make 20,000 units of Fancy X and 20,000 units of Plain X then each unit produced will be allocated the same amount of overhead.

Reference no: EM13589826

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