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Question # 2 (20 marks; 20 min)
Indirect labour (IDL) $10,600 $11,500
Indirect materials (IDM) 4,400 5,000
Total (MOH) $15,000 $16,500
DL(direct labour) $12,000 $15,000
MOH = a + b*DL cost
Required:
Determine a and b. (6 marks)
If DL cost is$13,200, how much would be allowed for IDL and IDM, individually?
Hint: Find the linear relationship between MOH and IDM (14 marks)
That is estimate MOH = c + d*IDM
Answer & Explanation
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