The controller of Ferrence Company estimates the amount of materials handling ov

Question

The controller of Ferrence 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:

If the materials handling cost is allocated on the basis of material moves, how much of the total materials handling cost would be allocated to the Specialty Windows?(Round your intermediate calculations to 2 decimal places. Round your final answer to the nearest whole dollar.)

1. $ 8,722

2. $ 6,041

3. $ 2,712

4. $ 7,689

The total materials handling cost for the year is expected to be $16,754.50. Wall Mirrors Specialty Windows Total expected units produced Total expected material moves 12,900 1,290 9 1,500 1,400 12 qxxicxd direxi lnbbor hour pr uii

Explanation / Answer

Total Material Handling Costs for the year = $ 16,754.50

Total Expected Material Moves = 1,290 + 1,400 = 2,690

Material Moves for Speciality Windows = 1,400

Material Handling Cost allocated to Speciality Windows = $ 16,754.50 x 1,400 / 2,690

                                                                                 = $ 8,722 i.e part (1) is the correct answer

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