The controller of Hartis Company estimates the amount of materials handling overhead cost that should be allocated to the company’s two products using the data that are given below:
The total materials handling cost for the year is expected to be $18,799.60.
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cost that should be allocated to the company's two products using the data that are given below:
Expert Answer
The correct answer is $ 13,965
Note :
| Wall Mirrors | Specialty Windows | |
| Total expected units produced | 7,800 | 2,700 |
| Direct labor-hours per unit | 4 | 4 |
| Hence, Total Direct Labor Hours = (Direct labor-hours per unit * Total expected units produced) | 31,200.00 | 10,800.00 |
| I. Total materials handling cost | 18,799.60 | |
| II. Total Direct Labor ( Wall Mirrors +Speciality Windows) | 42,000.00 | |
| Hence, Material Handling Cost Per Direct Labor Hour( I. / II) | 0.4476 | Per DIrect Labor Hour |
total materials handling cost to be allocated to the wall mirrors = Total Direct Labor Hours of Wall Mirrors * Material Handling Cost Per Direct Labor Hour
= 31,200 Hours * $ 0.4476
= $ 13,965.12
= $ 13,965
