Question

Halt company employee material handling employees who move materials between production divisions at a labor cost of $160,000 a year. It is estimated that these employees move 800,000 pounds of material per year. If 60,000 pounds are moved in March, how much of the material handling cost should be assigned to products made in March? -$12,000-12,800-26,666-13,333

Answer 1

The $12,000 is the material handling cost should be assigned to products made in March.

Thus, the correct option is a. $12,000

Step-by-step explanation:

For computing how much of the material handling cost should be assigned, first we have to calculate the per pound of material. The formula is shown below:

Per pound of material = Labor cost ÷ Number of pounds

= $160,000 ÷ 800,000

= $0.2 per pound of material

Now, multiply this per pound of material with moving pounds.

In mathematically,

Material Handling cost = Per unit of pound × Moving material

= $0.2 × 60,000

=$12,000

Hence, the $12,000 is the material handling cost should be assigned to products made in March.

Thus, the correct option is a. $12,000