Solution-What is the cost per hour allocation rate

What is the cost per hour allocation rate

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Reference no: EM132873509

Question - ABC Company guarantees a minimum number of hours of work using contracts.

ABC guarantees one of the workers, Peter, 200 hours of work (via a 5-week contract)

The cost of Peter's contract is $10,000.

Peter's total availability is 200 hours.

From the production schedule, ABC likely will only use Peter for 150 hours.

Question - The company has two options of how to allocate Peter per-hour labor cost to the different jobs based on how he works

What is the cost per hour allocation rate that ABC would use for one of these options?

What is the cost per hour allocation rate that ABC would use for the other option?

Briefly describe reasoning for why ABC would use each option.

Reference no: EM132873509

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What is the cost per hour allocation rate

Reference no: EM132873509

Reference no: EM132873509

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