Department D Has Recently Purchased and Installed New Computerized Equipment

Multiple Choice

Department D has recently purchased and installed new computerized equipment for Product X.This equipment will increase the overhead costs by $2,700 and decrease labor costs (due to time savings) in Department D by $3.00 per case.Machine hours will not change.If Smelly uses a plantwide rate based on direct labor hours,what is the revised product cost per case for Product X?

A) $82.50
B) $74.00
C) $79.50
D) $69.50