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Patie Company uses a standard FIFO, process-cost system to account for its only product, Mituea. Patie has found that direct machine hours (DMH) provide the best estimate of the application of O/H. Four (4) standard direct machine hours are allowed for each unit. Using simple linear regression analysis in the form y = a + b(DMH), given that (a) equals fixed costs and (b) equals variable costs, Patie has developed the following O/H budget for a normal activity level of 100,000 direct machine hours 400000 How much O/H should be applied to production?A. $1,413,384 B. $1,432,000 C. $1,358,250 D. $1,354,000 |