Answer:
The total material handling cost allocated to Modular homes is closest to $218195.2
Step-by-step explanation:
To determine the cost of material handling allocated to Modular homes, we first need to calculate the overhead absorption rate for materials handling cost based on the activity driver of material moves.
The overhead absorption rate or OAR:
OAR = Budgeted Overheads / Budgeted activity level
OAR-macterials handling = 300020 / (640+240) = $340.93 / material move
The total materials handling overheads allocated to Modular homes will be,
Total Overheads to modular homes = 340.93 * 640 = $218195.2