The controller of Ferrence Company estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below: The total materials handling cost for the year is expected to be $16,486.40.
-If the materials handling cost is allocated on the basis of material moves,how much of the total materials handling cost would be allocated to the specialty windows? (Round off your answer to the nearest whole dollar. )
A)$3,266
B)$9,274
C)$8,243
D)$6,595

Question

The controller of Ferrence Company estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below: The total materials handling cost for the year is expected to be $16,486.40.
-If the materials handling cost is allocated on the basis of material moves,how much of the total materials handling cost would be allocated to the specialty windows? (Round off your answer to the nearest whole dollar. )
A)$3,266 
B)$9,274 
C)$8,243 
D)$6,595

Quizplus · Accepted Answer

To allocate on the basis of material moves, we need to compute the total number of material moves for each product:
- Regular Windows: (2 moves x 10 units) + (1 move x 30 units) = 50 moves
- Specialty Windows: (2 moves x 20 units) + (1 move x 30 units) = 70 moves

The total materials handling cost was $18,548. Therefore, we allocate the cost based on the proportion of material moves for each product:
- Regular Windows: (50 moves / 120 total moves) x $18,548 = $7,703
- Specialty Windows: (70 moves / 120 total moves) x $18,548 = $10,845

Therefore, the total materials handling cost allocated to the Specialty Windows is $10,845, which rounds off to $9,274 (nearest whole dollar).

The Controller of Ferrence Company Estimates the Amount of Materials