Morris Company Allocates Overhead on the Basis of Direct Labor

Multiple Choice

Morris Company allocates overhead on the basis of direct labor hours. It allocates overhead costs of $12,800 to two different jobs as follows: Job 1: (10 hours) = $6,400; Job 2: (10 hours) = $6,400
The production process for Job 2 was then automated. Now Job 2 requires only two hours of direct labor but four hours of mechanical processing. As a result, total overhead increases to $17,000. With the change in the production process for Job 2, the amount of overhead assigned to:

A) each product will increase.
B) Job 1 will decrease.
C) each product will decrease.
D) Job 1 will increase.