The controller of Hallowell Company estimates the amount of materials handling o

Question

The controller of Hallowell 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: Table: data Wall Mirrors Specialty Windows Total expected units produced 2,000 7,000 Total expected material moves 100 600 Expected direct labor-hours per unit The total materials handling cost for the year is expected to be $18,257.40. If the materials handling cost is allocated on the basis of direct labor-hours, how much of the total materials handling cost would be allocated to the wall mirrors? (Round off your answer to the nearest whole dollar.) 0 $9,129 0 $3,961 O $6,086 O $11,618

Explanation / Answer

Answer : $9,129

Cost per direct labor-hour = Total materials handling cost ÷ Total direct labor-hours

= $18,257.40 ÷ 28,000 direct labor-hours = $0.65205 per direct labor-hour

Cost allocated to Wall Mirrors = $0.65205 per direct labor-hour × 14,000 direct labor-hours =$9128.70 or $9129

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