Hi @shaundracobb, welcome to Fluther!

This appears to be a homework question for an Econ class, is that correct? I ask because simply answering homework questions is frowned upon here.

You may find people guiding you towards an answer or giving tips on how to approach the question without giving away the punch line. Which in the end is actually more helpful.

Sorry I can’t be one of those people today I don’t know Econ :-)

Is this what you’re trying to do? It’s not in your book?

I know Managerial Accounting sucks, but this isn’t the place to go to have someone do your homework for you… so I’m not going to, but I will tell you that the question is essentially asking you to find the allocation base according to three different aspects of production: direct labor hours, direct labor costs and machine hours.

After that, all you have to do is apply what you already know to the problem. Since total costs are going to be 1.2 million and direct labor costs are going to account for 1 million of that, it only leaves 200 thousand dollars to account for. The problem does not give any other cost sources than labor and machine hours, so the 200 thou must be what it costs to run the machines for 40,000 hours.

I think you could probably take it from there. :)

Though if you get the answer… please tell us since I have no idea how to solve this.