Production workers for Chadwick Manufacturing Company provided 3,200 hours of la

Question

Production workers for Chadwick Manufacturing Company provided 3,200 hours of labor in January and 2,800 hours in February. The company, whose operation is labor intensive, expects to use 48,000 hours of labor during the year. Chadwick paid a $120,000 annual premium on July 1 of the prior year for an insurance policy that covers the manufacturing facility for the following 12 months. Required Based on this information, how much of the insurance cost should be allocated to the products made in January and to those made in February? (Do not round intermediate calculations.) Month Allocated Cost January February

Explanation / Answer

Calculate insurance cost per labour hour :

Insurance cost per labour hour = 120000/48000 = 2.5 per labour hour

January = 3200*2.5 = 8000

February = 2800*2.5 = 7000

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.