Jaime Inc.manufactures 2 products, sweaters and jackets.The company has estimated its overhead in the order-processing department to be $180,000.The company produces 50,000 sweaters and 80,000 jackets each year.Sweater production requires 25,000 machine hours, jacket production requires 50,000 machine hours.The company places raw materials orders 10 times per month, 2 times for raw materials for sweaters and the remainder for raw materials for jackets.How much of the order processing overhead should be allocated to jackets?
A)$90,000
B)$120,000
C)$110,770
D)$144,000

Question

Quizplus · Accepted Answer

The order processing overhead is allocated based on the number of orders. Jackets account for 8 out of 10 orders each month, which is 80% of the orders. Therefore, 80% of $180,000 is allocated to jackets, which is $144,000.

Jaime IncManufactures 2 Products, Sweaters and Jackets