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Acme Company manufactures two products, J and K, at the same…
Acme Cоmpаny mаnufаctures twо prоducts, J and K, at the same facility. Each product has its own production line. Acme’s total annual manufacturing overhead costs are $180,000, and its total annual direct labor hours (DLHs) are 15,000. The latter includes 8,000 DLHs related to the Product J production line and 7,000 DLHs related to the Product K production line. If Acme applies overhead costs to jobs using a single plantwide rate based on DLHs, Product J will be over-costed and Product K will be under-costed. Which of the following statements regarding the actual total annual overhead costs related to Products J and K is true?