Question & Answer: cost that should be allocated to the company's two products using the data that are given below:…..

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:

	Wall Mirrors	Specialty Windows
Total expected units produced	7,800	2,700
Total expected material moves	780	980
Direct labor-hours per unit	4	4

The total materials handling cost for the year is expected to be $18,799.60.

If the materials handling cost is allocated on the basis of direct labor-hours, how much of the total materials handling cost should be allocated to the wall mirrors? (Round your intermediate calculation to four decimal places. Round your final answer to nearest whole dollar.)

$31,200

$13,965

$9,131

$9,400

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

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