Question 7: Question 8: TB MC Qu. 7-140 The controller of Hendershot Corporation

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Question 7:

Question 8:

TB MC Qu. 7-140 The controller of Hendershot Corporation estimates The controller of Hendershot Corporation 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: 10 polnts Wall Specialty Mirrors Windows 10,500 Total expected units produced Total expected material moves Expected direct labor-hours per unit 1,610 1,510 4 1,050 References The total materials handling cost for the year is expected to be $16,842.30 If the materials handling cost is allocated on the basis of direct labor-hours, the total materials handling cost allocated to the wall mirrors is closest to: (Round your intermediate calculations to 4 decimal places.) Multiple Choice $10,611 $8,962 $15,772 $13,939

Explanation / Answer

7.)    $15772

Total Direct labor hours :

   Walls Mirror = 10500 units * 9 = 94500 Direct labor hours

Speciality windows = 1610 units * 4 = 6440 Direct labor hours

Total = 100940 Direct labor hours

Total material handling cost allocated to Wall Mirrors = material handling cost / Total Direct labor hours *  Walls Mirror Direct labor hours

   = $ 16842.3 /  100940  *  94500 Direct labor hours

= $0.1669 * 94500 Direct labor hours

= $15772

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