Question

Shaver Co. manufactures a variety of electric razors for men and women. The company's plant is partially automated. Listed below is cost driver information used in the product-costing system:

Overhead Cost Pool	Budgeted Overhead Cost			Budgeted Cost Driver Level		Cost Driver
Machinery depreciation/maintenance	$	171,276		25,200		Machine hours
Factory depreciation/utilities/insurance		122,340		25,200		Machine hours
Product design		587,232		37,140		Hours in design
Material handling		1,125,528		204,000		Pounds of raw materials

In addition, Shaver expects to spend $489,360 for 8,156 direct labor-hours. Two current product orders had the following requirements:

	Men’s Razors			Women’s Razors
Units produced and sold		19,000			24,000
Direct labor hours		50			60
Pounds of raw materials		625			515
Hours in design		40			43
Machine hours		62			47

What is the total manufacturing overhead assigned to the current order for Men's Razors if the firm uses a volume-based plant wide overhead rate based on direct labor dollars?

Multiple Choice

• $2,350.00.

• $15,252.00.

• $250.10.

• $12,300.00.

• $15,252.00.

Answer 1

Answer
Budgeted Overhead Cost	2006376	171276+122340+587232+1125528
Divide by Budgeted Direct labor costs	489360
Plantwide Overhead rate	410%
Direct labor cost per hour	60	489360/8156
Men’s Razors Direct labor cost	3000	50*60
X Plantwide Overhead rate	410%
Total manufacturing overhead assigned	$      12,300
Option D is correct : $12,300