A Company Estimates Total Overhead Costs for the Next Year

True/False

A company estimates total overhead costs for the next year to be $1,200,000 and wishes to use direct labor hours as its overhead allocation base.This company makes two products: (1)Fancy X,which requires three direct labor hours per unit,and (2)Plain X,which requires one direct labor hour per unit.If the company plans to make 10,000 units of Fancy X and 10,000 units of Plain X,then each unit produced will be allocated the same amount of overhead.