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The controller of Hartis Corporation estimates the amount of materials handling overhead cost that should be...

The controller of Hartis 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 16,500 1,600
Total expected material moves 1,650 1,500
Expected direct labor-hours per unit 9 4


The total materials handling cost for the year is expected to be $16,562.20.


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 2 decimal places.)

$10,714

$9,065

$14,042

$16,335

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Answer #1

Allocation Rate = Total Material Handling Cost/Number of direct labor hours

= 16,562.20/(16500*9+1600*4)

= 16,562.20/154900

= $0.10692188

i.e. $0.11

Hence, allocated to Wall Mirrors = Labor Hours*Rate per hour

= 16,500*9*0.11

= $16,335

Hence, the answer is $16,335

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