If the materials handling cost is allocated on the basis of direct labor-hours, the total materials handling cost allocated to the prefab barns is closest to:
A)$109,395
B)$48,620
C)$125,238
D)$68,640

Question

Quizplus · Accepted Answer

Predetermined overhead rate = $218,790 ÷ [(700 DLHs per unit × 5,000 units)+ (200 DLHs per unit × 8,000 units)] = $218,790 ÷ 5,100,000 DLHs $42.90 per 1,000 DLHs
Materials handling cost allocated to Prefab Barns = $42.90 per 1,000 DLHs × 200 DLHs per unit × 8,000 units = $68,640

If the Materials Handling Cost Is Allocated on the Basis