Harringer Co. has provided the following information for last year:
$$\begin{array} { l r l }
\text { Gallons input } & 10,000 & @ \$ 20 / \mathrm { gallon } \
\text { Labor costs } & 5,000 & @ \$ 20 / \mathrm { hr } \
\text { Overhead costs } & ? ? ? & \
\text { Gallons finished } & 8,000 & @ \text { selling price of } \$ 55 / \mathrm { gallon } \
\text { Total factor productivity } & 1.0732 &
\end{array}$$
The total overhead cost (rounded) is:
A) $172,200.
B) $109,989.
C) $140,000.
D) $200,000.

Question

Harringer Co. has provided the following information for last year:
$$\begin{array} { l r l } 
\text { Gallons input } & 10,000 & @ \$ 20 / \mathrm { gallon } \
\text { Labor costs } & 5,000 & @ \$ 20 / \mathrm { hr } \
\text { Overhead costs } & ? ? ? & \
\text { Gallons finished } & 8,000 & @ \text { selling price of } \$ 55 / \mathrm { gallon } \
\text { Total factor productivity } & 1.0732 &
\end{array}$$
The total overhead cost (rounded) is:
A) $172,200.
B) $109,989.
C) $140,000.
D) $200,000.

Quizplus · Accepted Answer

Total factor productivity (TFP) is calculated as output value divided by input costs. Using the given TFP of 1.0732, we can set up the equation: (8,000 gallons * $55) / (10,000 gallons * $20 + $5,000 labor + overhead) = 1.0732. Solving for overhead gives approximately $109,989.

Harringer Co The Total Overhead Cost (Rounded) Is: A) $172,200

Harringer Co The Total Overhead Cost (Rounded) Is:
A) $172,200