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Donkey Company manufactures two products, Standard and DeLuxe. Donkey's overhead costs consist of machining, $2,000,000; and assembling, $1,000,000. Information on the two products is:
Standard DeLuxeDirect labor hours 10,000 15,000Machine hours 10,000 30,000Number of parts 90,000 160,000
Overhead applied to Standard using traditional costing using direct labor hours is
A) $860,000.
B) $1,200,000.
C) $1,800,000.
D) $2,140,000.
Determine the amount of cash received and prepare the journal entries for (a) the Jan. 1 issuance and (b) the Dec. 31 recognition of interest.
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