The controller of the recently organized Crandall Company is considering the two methods listed… 1 answer below »

The controller of the recently organized Crandall Company is considering the two methods listed below for accounting for labor fringe benefits. Which of the two methods is considered acceptable? Method A: Treat all labor fringe benefits as indirect labor by adding them in total to manufacturing overhead. Method B: Treat labor fringe benefits that relate to direct labor as additional direct labor cost and fringe benefits relating to indirect labor as part of manufacturing overhead.

A) Only Method A is acceptable.

B) Only Method B is acceptable.

C) Both Method A and Method B are acceptable.

D) Neither Method A nor Method B is acceptable; labor fringe benefits should be treated as period expenses and should be charged off as incurred.