Swimm Company allocates materials handling cost to the company's two products using the below data: The total materials handling cost for the year is expected to be $72,065. 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)$16,014
B)$19,880
C)$36,890
D)$36,033

Question

Swimm Company allocates materials handling cost to the company's two products using the below data:  The total materials handling cost for the year is expected to be $72,065. 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)$16,014 
B)$19,880 
C)$36,890 
D)$36,033

Quizplus · Accepted Answer

Predetermined overhead rate = $72,065 ÷ [(700 DLHs per unit × 3,000 units)+ (200 DLHs per unit × 4,000 units)] = $72,065 ÷ 2,900,000 DLHs $24.85 per 1,000 DLHs
Materials handling cost allocated to Prefab Barns = $24.85 per 1,000 DLHs × 200 DLHs per unit × 4,000 units = $19,880

Swimm Company Allocates Materials Handling Cost to the Company's Two