Question

The Sit-N-Spin Corporation manufactures and assembles office chairs. Sit-N-Spin uses an activity-based costing system to allocate all manufacturing conversion costs. Each chair consists of 10 separate parts totaling $165 in direct materials, and requires 5.0 hours of machine time to produce. Additional information follows: Activity Allocation Base Cost Allocation Rate Materials handling Number of parts $2.75 per part Machining Machine hours $5.00 per machine hour Assembling Number of parts $1.50 per part Packaging Number of finished units $3.75 per finished unitWhat is the cost of materials handling per chair

Answer 1

Materials handling Allocation= $27.5

Step-by-step explanation:

Giving the following information:

Each chair consists of 10 separate parts totaling $165 direct materials and requires 5.0 hours of machine time to produce.

Materials handling= $2.75 per part

Machining= $5.00 per machine hour

Assembling= $1.50 per part

Packaging= $3.75 per finished unit

Material Handling allocation base is: Number of parts.

Allocation= 10 parts* $2.75= $27.5