Flowing Wells Corporation Is Preparing Its Annual Budget Under a Traditional Costing System That Assigns Overhead on the of Its

Multiple Choice

Flowing Wells Corporation is preparing its annual budget. As part of its analysis of the contribution of individual products to overall profitability, the controller estimates the amount of overhead that should be assigned to the individual product lines. Budgeted inspection costs are $4,800. Additional information is as follows $\begin{array}{lll}&\text { Small Pumps }& \text { Large Pumps }\\\hline \text { Units inspected } & 120 & 120 \\\text { Hours spent inspecting } & 2.5 & 17.5 \\\text { Direct labour hours per unit } & 2 & 2\end{array}$ Under a traditional costing system that assigns overhead on the basis of direct labour hours, the inspection costs allocated to one small pump would be:

A) $10
B) $15
C) $20
D) $24