Question

The controller of Hendershot Corporation 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:

	Wall Mirrors	Specialty Windows
Total expected units produced	15,600	1,340
Total expected material moves	1,560	1,240
Expected direct labor-hours per unit	8	12

The total materials handling cost for the year is expected to be $16,499.90.

If the materials handling cost is allocated on the basis of direct labor-hours, the total materials handling cost allocated to the wall mirrors is closest to: (Round your intermediate calculations to 4 decimal places.)

Multiple Choice

$12,781

$14,614

$9,453

$7,804

Answer 1

Correct answer-$ 14614

Cost per direct labor hour
Total Expected material handling cost	$ 16,499.90
Total direct labor hours [(15600 x 8)+(1340 x 12)]	140880
Cost per Direct labor hour	$        0.1171

Material handling cost allocated to Wall mirrors
Direct labor Hours (8 x 15600)	124800
Cost per Direct labor hour	$ 0.1171
Material handling Cost allocated	$ 14,614

Cost allocated =$0.1171 x 124800

Total labor hours for Wall mirror = direct labor hour per unit x total units.