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	6,000	3,000
Total expected material moves	500	100
Expected direct labor-hours per unit	6	9

The total materials handling cost for the year is expected to be $6,123.60.

If the materials handling cost is allocated on the basis of material moves, the total materials handling cost allocated to the specialty windows is closest to: (Do not round your intermediate calculations.)

Multiple Choice

• $1,980

• $1,021

• $3,674

• $3,062

Answer 1

Total materials handling cost	6123.6
Divide by Total expected material moves	600	=500+100
Activity rate	10.206
Expected material moves for Specialty Windows	100
X Activity rate	10.206
Materials handling cost allocated to the specialty windows	1021
Option B $1,021 is correct