Assume you're a product manager for a large, profit-seeking, manufacturing firm. Specifically, you manage 'product #3'. Information about the firm's product costs is provided below:
|
|
Product #1
|
Product #2
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Product #3
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|
Direct Materials
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$140,000
|
$ 70,000
|
$90,000
|
|
Direct Labor
|
$210,000
|
$130,000
|
$60,000
|
|
Overhead
|
?
|
?
|
?
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The three products use 4,200; 3,250; and 3,000 direct labor hours (respectively). Overhead costs are determined based on a single cost driver. Which of the following cost drivers would you select?
a. Direct Materials Dollars -
b. Direct Labor Dollars -
c. Total Direct Costs -
d. Direct Labor Hours -
e. Machine Hours -