Question

XYZ 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: Wall Mirrors Specialty Windows Total expected units produced 9,000 6,000 Total expected material moves 400 100 Expected direct labor-hours per unit 7 5 The total materials handling cost for the year is expected to be $6,800. The materials handling cost is allocated based on the number of materials moves. What is the total materials handling cost allocated to the specialty windows

Answer 1

Answer: $2,720

Step-by-step explanation:

Total materials handling cost for specialty windows = Proportion of total units * Total materials handling cost

Proportion of total units = Specialty units / (Specialty windows + Wall mirrors)

= 6,000 / (6,000 + 9,000)

= 0.4

Total material handling cost for specialty windows = 0.4 * 6,800

= $2,720